Use the Following Information to Answer Questions

question 52

Multiple Choice

Use the following information to answer questions
Lewis County uses a fiscal agent to distribute payments of interest to bondholders.Interest payments are due on July 1 of each year.The fiscal agent requires the County to transfer by June 20 the cash necessary to make the July 1 payments.
-How would Lewis County account for the amount transferred on June 20 if the County maintains its books and records in a manner that facilitates the preparation of the fund financial statements?

• A)Debit Cash with fiscal agent and expenditures; Credit Cash and interest payable.
• B)Debit Cash with fiscal agent and interest expense; Credit Cash and interest payable.
• C)Debit Expenditures; Credit Cash.
• D)Debit Cash with fiscal agent; Credit Cash.

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Definitions:

Investment in Associates

An investment in another company where the investor has significant influence, typically reflected by ownership of 20% to 50% of voting stock.

Net Loss

A situation where a company's total expenses exceed its total revenues, indicating that the business incurred a loss during a specific period.

Strategic Investments

Investments made with long-term goals in mind, often intended to yield sustainable competitive advantages.