A $910,000 Bond Was Issued on October 1, 2018 to Build

question 82

Essay

A $910,000 bond was issued on October 1, 2018 to build a new road.The bonds carried a 6% interest rate and are due in 10 years.
Required:
(A.) Prepare the required journal entry in the capital projects fund on October 1 for the governmental fund financial statements.
(B.) Prepare the required journal entry for the government-wide financial statements.

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Definitions:

Cost of Goods Sold

The total cost associated with producing the goods sold by a business, including materials, labor, and manufacturing overhead.

Direct Labour-hours

The total number of hours worked by employees directly involved in the production process.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the period begins based on estimated costs and activity levels.

Direct Labour Hour

Direct labour hour is a measure of the amount of time workers spend on direct production activities, directly involved in manufacturing goods or providing services.