Falmouth City Owns and Operates a Mini-Bus System Which It

question 76

Essay

Falmouth City owns and operates a mini-bus system which it accounts for in an enterprise fund. Prepare journal entries to record the following transactions, which occurred in a recent year.
a) The mini-bus system issued $5 million of 8 percent revenue bonds at par and used the proceeds to acquire new mini-buses.
b) As required by the bond covenant, the system set aside 1 percent of the gross bond proceeds for repair contingencies.
c) The system accrued 6 months interest on the revenue bonds at year-end.
d) The system incurred $30,000 of repair costs and paid for them with cash set aside for repair contingencies.

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Definitions:

Fixed Mindset

A belief that one's abilities, intelligence, and talents are fixed traits, leading to a focus on documentation rather than development of these traits.

Learned Helplessness

A state where an individual experiences feelings of helplessness, resulting from experiencing trauma or continuous lack of success.

Heuristics

Mental shortcuts that allow individuals to quickly select and apply schemas to new or ambiguous situations.

Schema Selection

The process of choosing relevant frameworks or cognitive structures from one's memory in order to interpret and understand new information.