The City of New Haven Issued $20 Million of Tax-Supported

question 18

Multiple Choice

The City of New Haven issued $20 million of tax-supported bonds at 102 to finance a new prison.Upon issuance,how will the premium be recorded?

• A) A $400,000 revenue to the capital projects fund and a $400,000 revenue in governmental activities.
• B) A $400,000 revenue to the debt service fund and a $400,000 premium on bonds payable in governmental activities.
• C) A $400,000 expenditure in the debt service fund and a $400,000 expense in governmental activities.
• D) A $400,000 other financing source to the debt service fund and a $400,000 premium on bonds payable in governmental activities.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, highlighting the net profit or loss.

Perpetual Inventory System

An immediate inventory recording technique utilizing computerized point-of-sale systems and enterprise asset management software to document sales or purchases.

Freight In

The cost of transportation or shipping of raw materials or goods into a production facility or warehouse.

Periodic Method

An accounting system where inventory values and cost of goods sold are determined at the end of an accounting period.