The following transactions affected a city’s general fund. Prepare a table in which you indicate for each transaction the expenditure/expense and change in liabilities that the city would report in its (a) general fund; and (b) government-wide statements.
1. City employees earned $7.7 million in vacation pay during the year, of which they took only $6.6 million. They may take the balance in the following three years.
2. The employees were paid $0.5 million for vacations that they had earned in previous years.
3. The city settled a claim brought against it during the year by a building contractor. The city agreed to pay $10 million immediately and $10 million at the end of the following year.
4. The city issued $100 million in general obligation bonds at par.
5. It paid $4 million in debt service. Of this, $3 million was for the first payment of interest, the balance for repayment of principal.