The City of Hiawatha issued $10 million of term bonds as of April 1, 2014.The bonds bear interest at 6 percent, due and payable each October 1 and April 1.Assuming the city maintains its books and records in a manner that facilitates the preparation of its fund financial statements the appropriate entity to record interest on the debt at June 30, 2015 (the city's fiscal year-end)is
A)Debit Expenditures $300,000; Credit Interest payable $300,000.
B)Debit Expenditures $300,000; Credit Other financing uses $300,000.
C)Debit Expenditures $300,000; Credit Due to bondholders $300,000.
D)No entry required.

Question

Quizplus · Accepted Answer

The Answer of The City of Hiawatha issued $10 million of term bonds as of April 1, 2014.The bonds bear interest at 6 percent, due and payable each October 1 and April 1.Assuming the city maintains its books and records in a manner that facilitates the preparation of its fund financial statements the appropriate entity to record interest on the debt at June 30, 2015 (the city's fiscal year-end)is
A)Debit Expenditures $300,000; Credit Interest payable $300,000.
B)Debit Expenditures $300,000; Credit Other financing uses $300,000.
C)Debit Expenditures $300,000; Credit Due to bondholders $300,000.
D)No entry required.

The City of Hiawatha Issued $10 Million of Term Bonds