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general obligation bonds fixed asset construction select the best response for each 614444

General obligation bonds, fixed asset construction. Select the best response for each of the following multiple-choice questions which refer to the transactions of Finch City.

On March 2, 20X1, Finch City issued 10-year general obligation bonds at face amount, with interest payable on March 1 and September 1. The proceeds were to be used to finance the construction of a civic center over the period of April 1, 20X1, to March 31, 20X2. During the fiscal year ended June 30, 20X1, no resources had been provided to the debt service fund for the payment of principal and interest.

1. On June 30, 20X1, Finch’s debt service fund should include interest payable on the general obligation bonds for

a. zero months.

b. three months.

c. four months.

d. six months.

2. Proceeds from the general obligation bonds should be recorded in the

a. general fund.

b. capital projects fund.

c. general long-term debt account group.

d. debt service fund.

3. The liability for the general obligation bonds should be recorded in the

a. general fund.

b. capital projects fund.

c. general long-term debt account group.

d. debt service fund.

4. On June 30, 20X1, the balance sheet part of Finch’s fund financial statements should report the construction in progress for the civic center in the

Capital Projects

General Fixed Assets

Fund

Account Group

Yes

Yes

Yes

No

No

No

No

Yes

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