The accounting for BANs depends on events subsequent to year-end.
In anticipation of issuing of long-term bonds, a state issues $200 million of 60-day BANs to finance highway construction. It expects to roll over the BANs into long-term bonds within 60 days. Its fiscal year ends on May 31.
1. Prepare the appropriate journal entry in a governmental fund (such as a capital projects fund) to record the issuance of the $200 million, 60-day BANs on May 1, 2013.
2. Prepare the appropriate journal entry, if required, to record the conversion of the BANs to long-term bonds on June 18, 2013.
3. Prepare the appropriate journal entry, if required, to adjust the accounts as of year-end May 31, 2013, assuming that the state was unable to convert the BANs to long-term bonds.
4. Comment on how the BANs are reported on the government-wide statements as of May 31, 2013, assuming first that they were converted and second that they were not converted.

  • CreatedApril 29, 2015
  • Files Included
Post your question