Craven City borrows $2,000,000 in bonds payable on January 1, 2022, and the bonds are scheduled to be repaid over 10 years, with the first payment scheduled fo December 31, 2022. The bonds have a stated interest rate of 5%, and interest is payable annually with the first interest payment scheduled for December 31, 2022. Assuming the debt is repaid from a debt service fund (because the bond proceeds were used to benefit the governmental funds), what amount of expenditures would be recognized in the debt service fund for 2022? What amount of expense would be recognized if the bonds were repaid in an enterprise fund (because the bond proceeds were used to benefit the enterprise fund)?

Craven City borrows $2,000,000 in bonds payable on January 1, 2022, and the bonds are scheduled to be repaid over 10 years, with the first payment scheduled fo December 31, 2022. The bonds have a stated interest rate of 5%, and interest is payable annually with the first interest payment scheduled for December 31, 2022. Assuming the debt is repaid from a debt service fund (because the bond proceeds were used to benefit the governmental funds), what amount of expenditures would be recognized in the debt service fund for 2022? What amount of expense would be recognized if the bonds were repaid in an enterprise fund (because the bond proceeds were used to benefit the enterprise fund)?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Wood City, which is legally obligated to maintain a debt service fund, issued the following general obligation bonds on July 1, Year 1: Term of bonds 10 years, Face amount $1,000,000, Issue price 95 , Stated interest rate 6% Interest is payable January 1 and July 1. What amount of bond discount should be amortized in Wood's debt service fund for purposes of fund financial reporting for the year ended December 31, Year 1? A.) $1,000 B.) $500 C.) $250 D.) $0
On October 31, 2020, the Village of Lexington issued $1,000,000 of 3% general obligation serial bonds. The bonds pay interest on April 30 and October 31. Starting on October 31, 2021, the first of 20 equal annual serial payments of $50,000 was made. At December 31, 2022, what is the amount of accrued but unmatured interest that is not reported by the debt service fund? A. $4,875. B. $5,000. C. $4,500. D. $4,750.
H1).
This question asks to make jiurnak entries pkease read and answer carefully
At December 31, 2020, Marigold Company has outstanding three long-term debt issues. The first is a $2,210,000 note payable which matures June 30, 2023. The second is a $5,360,000 bond issue which matures September 30, 2024. The third is a $12,640,000 sinking fund debenture with annual sinking fund payments of $2,528,000 in each of the years 2022 through 2026.Prepare the required note disclosure for the long-term debt at December 31, 2020. Long Term Debt 2021 2022 2023 2024 2025
On March 2, 2022, 20-year, 3 percent, general obligation serial bonds were issued at the face amount of $3,000,000. Interest of 3 percent per annum is due semiannually on March 1 and September 1. The first payment of $150,000 for redemption of principal is due on March 1, 2023. Fiscal year-end occurs on December 31. What is the interest expenditure in the governmental funds for the fiscal year ending December 31, 2022?
During 2019, the Zeppelin City Debt Service Fund paid $18100 towards general long-term debt principal and $4400 towards interest on general long-term debt. What amount will be reported as Expenditures for Debt Service for 2019? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. Your Answer: Answer
Required Information [The following information applies to the questions displayed below.] On January 1, 2024, Splash City Issues $380,000 of 8% bonds, due in 15 years, with Interest payable semiannually on June 30 and December 31 each year. Assuming the market Interest rate on the issue date is 9%, the bonds will issue at $349,051. 2. How will the bond Issuance on January 1, 2024, affect the financial statements? 3. How will the first two semiannual Interest payments on June 30, 2024, and December 31, 2024, affect the financial statements? Complete this question by entering your answers in the tabs below. Req 2 Req 3A Assets Req 38 How will the bond issuance on January 1, 2024, affect the financial statements? Note: Amounts to be deducted should be indicated by a minus sign. Balance Sheet Liabilities Stockholders' Equity Common Stock Retained Earnings Revenues Income Statement Expenses Net Income
Skysong Co. is building a new hockey arena at a cost of $2,310,000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $1,820,000 to complete the project. It therefore decides to issue $1,820,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 11%. Assume that on July 1, 2022, Skysong Co. redeems half of the bonds at a cost of $1,001,900 plus accrued interest. Prepare the journal entry to record this redemption. (to record Interest and to record reacquisition)
Sunland Co. is building a new hockey arena at a cost of $2,680,000. It received a downpayment of $500,000 from local businesses to support the project, and now needs to borrow $2,180,000 to complete the project. It therefore decides to issue $2,180,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Click here to view factor table. (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places, e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date January 1, 2024 Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Debit 920,854 Credit…
On December 31, 2024, L Incorporated had a $3,000,000 note payable outstanding, due July 31, 2025. L borrowed the money to finance construction of a new plant. L planned to refinance the note by issuing long-term bonds. Because L temporarily had excess cash, it prepaid $650,000 of the note on January 23, 2025. In February 2025, L completed a $4,500,000 bond offering. L will use the bond offering proceeds to repay the note payable at its maturity and to pay construction costs during 2025. On March 13, 2025, L issued its 2024 financial statements. What amount of the note payable should L include in the current liabilities section of its December 31, 2024, balance sheet? Multiple Choice A. $0 B. $650,000 C. $2,350,000 D. $3,000,000 Please don't provide answer in image format thank you
Coronado Co. is building a new hockey arena at a cost of $2,420,000. It received a downpayment of $510,000 from local businesses to support the project, and now needs to borrow $1,910,000 to complete the project. It therefore decides to issue $1,910,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Click here to view factor table. (a) Your answer is partially correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places, e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date January 1, 2024 Account Titles and Explanation Cash Premium on Bonds Payable…