The City of Spartan's Fiscal Year Ends on December 31

question 49

Multiple Choice

The City of Spartan's fiscal year ends on December 31. On October 1, 2020, the city issued $1,000,000 of 6%, 10-year term bonds with semiannual interest payments due on April 1 and October 1 each year, beginning on April 1, 2021. What amount of expense should the city recognize in its governmental activities journal for the years 2020 and 2021?

• A) $60,000 in 2020; $60,000 in 2021.
• B) $30,000 in 2020; $60,000 in 2021.
• C) $15,000 in 2020; $60,000 in 2021.
• D) $0 in 2020; $60,000 in 2021.

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Definitions:

David Hume

An 18th century Scottish philosopher, famous for his skepticism and empiricism.

Systematic Understanding

Comprehensive comprehension structured through organized and logical reasoning, often used in scientific and philosophical contexts.

Knowledge

Expertise or know-how developed through learning or direct involvement; a grasp of a subject matter, whether through academic means or real-world practice.

Rationalism

A philosophical stance prioritizing reason and logic as the primary source of knowledge over sensory experience.