Analyze each of the following transactions and events. (1) Indicate all of the effects of each transaction
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1. The government issued $4,000,000 of 6%, 10-year bonds at 100 on July 15, 20X3. Interest is payable semiannually on January 15 and July 15 of each year. The bonds were issued to finance construction of a major addition to the government’s primary office building.
2. The government was billed $2,800,000 during the year by the courthouse addition contractor for work performed on the courthouse during the year. The government paid $2,200,000 to the contractor.
3. On July 29, 20X3, the government paid $120,000 from the General Fund to the fund from which the courthouse bonds principal and interest are to be repaid.
4. The government repaid a 5-year, $300,000 note payable and interest on August 15, 20X3. The note was repaid directly from the General Fund. The payment included $15,000 of interest.
5. The government issued $14,000,000 of 6%, 10-year bonds at 100 on September 30, 20X3.
Interest is payable semiannually on March 31 and September 30 of each year. The bonds were issued to finance construction of a major addition to the government’s water plant. The water and sewer department is one of the government’s business-type operations, not a general government operation.
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Related Book For
Governmental and Nonprofit Accounting
ISBN: 978-0132751261
10th edition
Authors: Robert Freeman, Craig Shoulders, Gregory Allison, Robert Smi
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