Dayton County Decided to Refund an Outstanding Term Bond Issue

question 24

Essay

Dayton County decided to refund an outstanding term bond issue in its Enterprise Fund. The old bonds have a par value of $3,200 and an unamortized premium of $120. These bonds are scheduled to mature in 6 more years.
Transactions:
1. On January 2, 20x2, the County issued refunding bonds at par, $3,700. The bonds bear interest at 5% payable annually and mature in five years. The bond issuance costs were $250.
2. On January 2, The County paid $3,800 into an irrevocable trust in order to defease in substance the previously outstanding bonds payable of the Enterprise Fund.
3. The annual interest payment on the new bonds was made on December 31 when due.
Requirements:
1. Prepare the journal entries required in an Enterprise. If no entry is required, state "No entry required" and explain why.
2. Indicate the effects of each transaction on the accounting equation of the Enterprise Fund accounts. If an element of the equation is not affected or if the net effect is zero, put "NE" in the appropriate box.

Assess the reliability and importance of evidence in forming beliefs and arguments.

Differentiate between various sources of evidence and their relative reliability.

Appreciate the role of expert testimony in evaluating claims.

Describe strategies for enhancing memory and recall of visual experiences.

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Definitions:

Revenue Variance

The difference between the actual revenue earned and the expected or budgeted revenue.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance.

Variable Costs

Expenses that fluctuate in direct proportion to the production or sales volume, for instance, direct labor and raw materials.

Budgeting

The process of creating a plan to spend your money, allocating financial resources for various purposes over a specified period.