Star City Leased a Bulldozer for Use in Activities Accounted

question 61

Multiple Choice

Star City leased a bulldozer for use in activities accounted for in the general fund. The city paid $40,000 and agreed to pay $40,000 per year for 3 years. The bulldozer has a useful life of six years. The lease qualified as a capital lease. Assuming that the city maintains is books and records in a manner that facilitates the preparation of the government-wide financial statements, the appropriate entry at the date of acquisition would be

• A) Debit Expenditures $160,000; Credit Cash $40,000 and Other financing sources $120,000.
• B) Debit Expenditures $53,333 and Prepaid lease $106,667; Credit Cash $40,000 and Other financing sources $120,000.
• C) Debit Equipment $160,000; Credit Cash $40,000 and Lease payable $120,000.
• D) Debit Expenditures $160,000; Credit Cash $40,000 and Lease payable $120,000.

Identify false statements regarding bankruptcy, debt collection, and the repercussions on both creditors and debtors.

Understand the legal process for challenging fraudulent asset transfers pre-bankruptcy.

Know the false propositions related to bankruptcy and asset protection strategies.

Understand miscellaneous laws related to banking, secured transactions, and remedies in cases of default.

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Definitions:

Endorsement

The act of giving public approval or support to someone or something.

Accounts Receivable

Money owed to a company by its debtors, representing funds due for goods or services provided on credit.

Accounts Payable

Money owed by a company to its creditors or suppliers for goods or services that have been delivered but not yet paid for.

Person

An individual human being.