Use the Following to Answer the Next Six Questions

question 41

Multiple Choice

Use the following to answer the next six questions:
During the fiscal year ended December 31, 2012, the City of Johnstown issued 6% general obligation serial bonds in the amount of $3,000,000 at 101 ($3,030,000) and used $2,970,000 of the proceeds to construct a fire station. The $30,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2012 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2013.
-How would the government account for the transfer of the unused bond proceeds?

• A) As a revenue in the debt service fund and as an expenditure in the capital projects fund.
• B) As an other financing source in the capital projects fund and as an other financing use in the debt service fund.
• C) As a special item in both the debt service and capital project funds.
• D) As an other financing source in the debt service fund and as an other financing use in the capital projects fund.

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Definitions:

Friendly Witness

A witness who is biased against your client’s adversary or sympathetic toward your client in a lawsuit or other legal proceeding. An adverse witness.

Subsequent Client Interview

A follow-up meeting with a client that takes place after the initial discussion or consultation.

Bankruptcy Filing

The legal procedure initiated by an individual or company declaring inability to repay outstanding debts, seeking relief through the court.

Witness Statement

The written record of the statements made by a witness during an interview, signed by the witness.