Previously Atomic City Had Issued Bonds with a Face Value

Previously Atomic City had issued bonds with a face value of $10 million to construct a new city hall.Because the money will not be needed for several months, the city invested the bond proceeds in U.S.Government securities.Assuming that the city maintains its books and records in a manner that facilitates the preparation of the fund financial statements, what is the appropriate entry when the City receives interest on the investments?

A) Debit Cash; Credit Revenue.
B) Debit Cash; Credit Other financing source
C) Debit Cash; Credit Deferred revenue
D) No entry required.

Correct Answer:

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