Pocahontas School District, an Independent Public School District, Financed the Acquisition

question 15

Multiple Choice

Pocahontas School District, an independent public school district, financed the acquisition of a new school bus by signing a note for $105,000 plus interest on the unpaid balance at 6%.Annual principal payments of $35,000, plus interest, are due each July 1.Assuming that the District maintains its books and records in a manner that facilitates the preparation of the government-wide financial statements, the appropriate entry at the date of acquisition is

• A)Debit Expenditures $105,000; Credit Notes payable $105,000.
• B)Debit Fixed assets $105,000; Credit Notes payable $105,000.
• C)Debit Expenditures $105,000; Credit Other financing sources $105,000.
• D)Debit Fixed assets $105,000; Credit Other financing sources $105,000.

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