A State Issues Long-Term Debt to Finance a Major Construction

question 23

Multiple Choice

A state issues long-term debt to finance a major construction project.The first installment of debt service requires payment of principal of $75,000 and interest of $100,000.Which of the following statements is true on the day that payment for principal and interest is legally due?

• A)expenditures of $175,000 should be recognized in the debt service fund.
• B)expenditures of $75,000 should be recognized in the capital projects fund and expenditures of $100,000 should be recognized in the debt service fund.
• C)expenditures of $100,000 should be recognized in the debt service fund and bonds payable should be reduced by $75,000 in the debt service fund.
• D)expenditures of $175,000 should be recognized in the debt service fund and bonds payable should be reduced by $75,000 in the capital projects fund.

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Definitions:

Social Entertainment

Activities and media designed to provide amusement and enjoyment in a social context, such as movies, games, and social media.

SBAR

An acronym for Situation, Background, Assessment, and Recommendation; a standardized communication method used especially in healthcare to facilitate clear and effective exchanges.

Recommendation

An advice or suggestion put forward for consideration by others, often based on expertise or experience.

Assessment

The process of evaluating or estimating the nature, ability, or quality of something, often through collecting and analyzing data.