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

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