In 2015, Plumeria City issued 10 year bonds on behalf of Dragonfly, a not-for-profit organization aimed...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
In 2015, Plumeria City issued 10 year bonds on behalf of Dragonfly, a not-for-profit organization aimed at improving health in the city. In 2022, Dragonfly files for bankruptcy as a result of a large, unexpected, increase in staffing costs due to the COVID-19 pandemic. At what point will Plumeria City recognize a liability for the debt held by Dragonfly that was part of the conduit debt arrangement. When Plumeria City has legally assumed the debt of Dragonfly, most likely after the bankruptcy proceeding have been completed When it is more likely than not that Plumeria City will have to pay the debt of Dragonfly. The liability was already recognized in the financial statements of the City at the time the debt was issued in 2015. O Plumeria City will not ever recognize Dragonfly's debt. By definition, conduit debt never becomes the liability of the governmental entity that issued the debt. In 2015, Plumeria City issued 10 year bonds on behalf of Dragonfly, a not-for-profit organization aimed at improving health in the city. In 2022, Dragonfly files for bankruptcy as a result of a large, unexpected, increase in staffing costs due to the COVID-19 pandemic. At what point will Plumeria City recognize a liability for the debt held by Dragonfly that was part of the conduit debt arrangement. When Plumeria City has legally assumed the debt of Dragonfly, most likely after the bankruptcy proceeding have been completed When it is more likely than not that Plumeria City will have to pay the debt of Dragonfly. The liability was already recognized in the financial statements of the City at the time the debt was issued in 2015. O Plumeria City will not ever recognize Dragonfly's debt. By definition, conduit debt never becomes the liability of the governmental entity that issued the debt.
Expert Answer:
Answer rating: 100% (QA)
When it is more likely than not that Plumeria City will have to pa... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
Dudley B. Durham, Jr. and Barbara L. Durham, husband and wife, and their farming and trucking corporations, Double D Farms, Inc. and L.B. Trucking, Inc petitions on December 20, 1983 * * *. On March...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
ZA Berhad is an investment holding company located in Malaysia. Property development, building, property investment, and management services are the primary activities of the corporation and its...
-
Why will a universal standards system involving as few as 20 benchmark standards work in a large maintenance department where thousands of different jobs are performed each year?
-
Repeat Exercise 5.6 but make the operator an update operator.
-
Suppose college students are given two options. With option A, the price a student pays for a class is always the equilibrium price. For example, if the equilibrium price to take Economics 101 is...
-
Wayne Terrago, controller for Robbin Industries, was reviewing production cost reports for the year. One amount in these reports continued to bother himadvertising. During the year, the company had...
-
The atomic number of element M, N, R, and T are 1, 8, 12 and 14 respectively. The element which can form ions by either losing or gaining electron(s) is M 11. A. B. N C R D. T 12. The atomic number...
-
Grimes Corporation began business in 2017 and incurred losses for its first two years. In 2019, it became profitable. The following table shows Grimess taxable income before consideration of its...
-
REVIEW each of the following scenarios . Then, choose the responses that describes a nontaxable exchange. In each scenario, the taxpayer acquired property of equal or greater value. (A) Gillian...
-
Lucas Contracting, Inc., is a small contractor in Carrollton, Ohio. Altisource Portfolio Solutions, Inc., hired Lucas to work on certain foreclosed properties. When payment for the work was not...
-
Promises made with consideration based on events that have already taken place are fully enforceable. (True/False)
-
The doctrine of promissory estoppel requires a clear and definite promise. (True/False)
-
Leah, the president of United Sales, Inc., tries to ensure that Uniteds actions are legal and ethical. To achieve this result, the best course for Leah and United is to act in a. good faith. b....
-
Which tort is the civil side of crimes related to theft?
-
a. In the financial market in general, the securities and funds management industry relies on trust and confidence to keep its relevance. Similarly, personal conduct by professionals in the industry...
-
Explain how the graph of each function can be obtained from the graph of y = 1/x or y = 1/x 2 . Then graph f and give the (a) Domain (b) Range. Determine the largest open intervals of the domain over...
-
Leslie is a single taxpayer who is under age 65 and in good health. For 2012, she has a salary of $23,000 and itemized deductions of $1,000. Leslie is entitled to one exemption on her tax return. a....
-
How are qualified dividends taxed in 2012? Please give the two rates of tax which apply to qualified dividends, and specify when each of these rates applies._________________________...
-
Lisa Sizemore, a taxpayer in the 10-15 percent tax bracket, purchased stock as an investment on July 11, 2011. She sold the stock on July 9, 2012, 2 days before qualifying for the long-term holding...
-
Bethany, who weighs 560 N, lies in a hammock suspended by ropes tied to two trees. One rope makes an angle of 45 with the ground; the other makes an angle of 30. Find the tension in each of the ropes.
-
In the Skycoaster amusement park ride, riders are suspended from a tower by a long cable. A second cable then lifts them until they reach the starting position indicated in Figure P5.3. The lifting...
-
In the winter sport of curling, two teams alternate sliding 20 kg stones on an icy surface in an attempt to end up with the stone closest to the center of a target painted on the ice. During one...
Study smarter with the SolutionInn App