On October 1, 2014, the City of Mizner issued $4,000,000 in 4%, general obligati

Question

On October 1, 2014, the City of Mizner issued $4,000,000 in 4%, general obligation bonds at 101 for the purpose of constructing an addition to City Hall. The premium was transferred to a
debt service fund. A total of $3,975,000 was used to construct the addition, which was completed prior to June 30, 2015. The remaining funds were transferred to the debt service
fund. The bonds were dated October 1, 2014, and paid interest on April 1 and October 1. The first of 20 annual principal payments of $200,000 is due October 1, 2015. The fiscal year for
Mizner is July 1- June 30.

What amount would be reported as debt service expenditures in the year ended June 30, 2015?

A) $ -0- .
B) $ 80,000.
C) $160,000.
D) $360,000.

please show how you got the answer.

Explanation / Answer

Amount of expenditures recorded by Debt Service Fund = $4,000,000 X 4%

Amount of expenditures recorded by Debt Service Fund = $160,000

Note- Kindly give a thumbs up if you are satisfied with the answer. It would help me a lot. Thanks.

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.