Use the Following Information to Answer Question

question 10

Multiple Choice

Use the following information to answer question
Due to changes in the prevailing interest rates, Washington County has decided to issue new 5% bonds and place the proceeds with a trustee in a manner structured to satisfy all the GASB requirements for an in-substance defeasance of an existing 6.5% bond issue.The 6.5% bonds were originally issued to fund highway projects and the debt is reported in the Schedule of Long-term Obligations and in the governmental activities column of the government-wide financial statements.The old 6.5% bonds are still actively traded in the bond market and will be until their maturity.The new 5% bonds will be sold to an institutional buyer who may also sell them in the bond market.
-Which bonds should be recognized in the Schedule of Long-Term Obligations?

• A)Neither the 6.5% nor the 5% bonds.
• B)Both the 6.5% bonds and the 5% bonds.
• C)Only the 6.5% bonds.
• D)Only the 5% bonds.

---

Definitions:

Synchronous Motor

An AC motor that operates at a constant speed, set by the power supply frequency, and whose rotor is synchronized with the magnetic field of the stator.

Amortisseur Winding

A squirrel-cage winding on the rotor of a synchronous motor used for starting purposes only.

Phase Rotation Meter

A meter used to determine the rotation of a motor.

Machinery

Mechanical devices or assemblies, which perform specific functions in industrial, agricultural, or domestic settings.