Voters in Lincoln School District Approved the Construction of a New

question 17

Multiple Choice

Voters in Lincoln School District approved the construction of a new high school and approved an $8 million bond issue with a stated rate of interest of 6 percent to fund the construction. Bids were received, and the low bid was $8 million. When the bonds were issued, they sold for face value less bond underwriting fees of $0.5 million. The school board voted to fund the balance of the construction by a transfer from the general fund.
-The entry in the capital projects fund to record the additional funding for the construction should be

• A) Debit Due from general fund $0.5 million; Credit Other financing sources-nonreciprocal transfer-in $0.5 million.
• B) Debit Due from general fund $0.5 million; Credit Revenue $0.5 million.
• C) Debit Cash $0.5 million; Credit Due to general fund $0.5 million.
• D) Debit Other financing sources $0.5 million; Credit Due to general fund $0.5 million.

---

Definitions:

Total Costs

The sum of all expenses incurred by a business in the production of goods or services, including fixed and variable costs.

Output

The amount of goods or services produced by a company, industry, or economy within a specified period.

VC

Venture Capital, a form of private equity financing provided by investors to startups and small businesses with long-term growth potential.

AVC

Average Variable Cost, which is the total variable costs (costs that change with production levels) divided by the quantity of output produced.