Question: Marloweville with 20 000 residents is deciding how to finance the

Marloweville, with 20,000 residents, is deciding how to finance the construction of a new municipal golf course that will enhance both recreation and tourism in the area. The construction cost of the golf course is $ 10,000,000. By law, all proceeds from debt issuance are placed in the Marloweville’s Capital Projects Fund, and all capital expenditures are made using this fund.
1. Show how Marloweville would record the trans-action(s) if it were to issue a $ 10,000,000 bond and then use the proceeds to construct the golf course.
2. Show how Marloweville would record the transaction if it were to finance 50 percent of the construction with a municipal bond and 50 percent thorugh a transfer from the Rainy Day Fund *(a governmental fund).
3. If at the end of the fiscal year, Marloweville makes a loan repayment of $ 250,000, plus a $ 50,000 interest payment, the total expenditure for the transaction will equal:
a. $ 0
b. $ 250,000
c. $ 50,000
d. $ 300,000

Sale on SolutionInn
  • CreatedDecember 19, 2014
  • Files Included
Post your question