A City Keeps Its Books on a Calendar Year Basis

question 30

Multiple Choice

A city keeps its books on a calendar year basis.On April 1,2013,the city sold $500,000 of 6% general obligation bonds,payable in semi-annual installments.The first installment,due October 31,2013 covered interest of $15,000 and principal of $25,000.For the year ended December 31,2013,how much should the Debt Service Fund report as expenditures?

• A)$15,000
• B)$40,000
• C)$15,000,plus an accrual for three months' interest
• D)$40,000,plus an accrual for three months' interest and principal

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Definitions:

Density

A measure of mass per unit volume of a substance, often expressed in grams per cubic centimeter or kilograms per cubic meter.

Volume

The volume is the space filled by an object or substance, or the space encased by a container.

Sample

A portion or quantity of material taken from a larger body for the purpose of analysis or testing.