Question
In: Accounting
Chapel Hill, North Carolina (population 57,000) issued $1,600,000, 20-year, 4 percent serial bonds on April 1,...
Chapel Hill, North Carolina (population 57,000) issued $1,600,000, 20-year, 4 percent serial bonds on April 1, 2018 to finance construction of an addition to its city commerce center. The bonds pay interest each April 1 and October 1 of each year; in addition, bond principal of $80,000 is redeemed each October 1. The interest and principal payments are transferred from the General Fund to the Debt Service Fund one day prior to the interest payment dates (3/31 and 9/30). Chapel Hill follows a calendar year for this problem. Hint: Draw a line chart with interest and principal dates and calculate the 2018 activity and 2019 activity.
11. The adoption of the FY 2019 budget in the Debt Services Fund
would include a:
A. Debit to Estimated Revenues, $60,800.
B. Credit to Appropriations, $140,800.
C. Debit to Estimated Other Financing Sources, $60,800.
D. Credit to Fund Balance—Restricted, $140,800.
12. The Debt Services Fund would record the receipt of the transfer
of funds from the General Fund on March 31, 2019 (for the April 1,
2019 interest payment). The March 31 entry in the Debt Services
Fund would include a:
A. Credit to Other Financing Sources—Transfers-in, $32,000.
B. Debit to Cash, $30,400.
C. Credit to Revenues, $30,400.
D. Debit to Cash, $32,000.
13. The April 1, 2019 entry to record the serial bond interest
payment in the Debt Services Fund would include a:
A. Credit to Cash, $30,400.
B. Debit to Expenditures—Interest, $32,000.
C. Debit to Interest Payable, $30,400.
D. Credit to Cash, $15,200.
14. The April 1, 2019 entry to record the serial bond interest
payment at the government-wide level would include a:
A. Debit to Expenses—Interest on Long-term Debt, $15,200.
B. Debit to Interest Payable, $30,400.
C. Credit to Cash, $15,200.
D. Credit to Cash, $32,000.
15. The Debt Services Fund would record the receipt of the transfer
of funds from the General Fund on September 30, 2019 (for the
October 1, 2019 interest + principal payment). The September 30
entry in the Debt Services Fund would include a:
A. Debit to Cash, $90,400.
B. Credit to Other Financing Sources—Transfers-in, $112,000.
C. Debit to Expenditures—2019, 112,000.
D. Credit to Other Financing Sources—Transfers-in, $110,400.
16. The October 1, 2019 entry to record the serial bond interest
and principal payment in the Debt Services Fund would include
a:
A. Credit to Cash, $108,800.
B. Credit to Cash, $112,000.
C. Debit to Bonds Payable, $80,000.
D. Credit to Cash, $110,400.
17. The October 1, 2019 entry to record the serial bond interest
and principal payment at the government-wide level would include
a:
A. Debit to Interest Payable, $30,400.
B. Debit to Expenses—Interest on Long-term Debt, $28,800.
C. Debit to Expenses—Bonds Payable, $80,000.
D. Debit to Expenses—Interest on Long-term Debt, $30,400.
18. The December 31, 2019 entry at the government-wide level to
record the accrued interest would include a:
A. Credit to Cash, $30,400.
B. Debit to Expenses—Interest on Long-term Debt, $28,800.
C. Debit to Expenses—Interest on Long-term Debt, $14,400.
D. Credit to Interest Payable, $30,400.
19. On the City of Chapel Hill, NC Debt Services Fund, Statement of
Revenues, Expenditures, and Changes in Fund Balances for the year
ended, December 31, 2019, the following would be reported:
A. Expenditures—Interest on Bonds, $59,200.
B. Increase in Fund Balances, $0.
C. Expenses—Long-term Interest on Bonds, $60,800.
D. Revenues, $140,800.
20. Assume the bond in this fact pattern was a term bond. Using the
same interest payment dates of April 1 and October 1, what is the
total amount of interest expenditure that would be reported on the
Statement of Revenues, Expenditures, and Changes in Fund Balances
for the year ended, December 31, 2019?
A. $64,000.
B. $45,600.
C. $48,000.
D. $32,000.
Solutions
Expert Solution
11) C. Debit to estimated other financing sources $60,800
12) B. Debit to cash $30,400
13) D. Credit to cash $15,400
14) A. Debit to expenses-- interest on long term debt $15,200
15) C. Debit to expenditure 2019, 112,00
16) A. Credit to cash $108,800
17) A. Debit to interest payable $30,400
18) C. Credit to expense interest on long term debt $14,400
19) D. Revenues $140,800
20) B. $45,600
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