Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 35

Bonds, various funds/groups. Rose City formally integrates budgetary accounts into its general fund. During the year ended December 31, 2019, Rose received a state grant to buy a bus and an additional grant for bus operation in 2019. In 2019, only 90% of the capital grant was used for the bus purchase, but 100% of the operating grant was disbursed. Rose has incurred the following long-term obligations:
a. General obligation bonds issued for the water and sewer fund which will service the debt.
b. Revenue bonds to be repaid from admission fees collected from users of the municipal recreation center.
These bonds are expected to be paid from enterprise funds and are secured by Rose's full faith, credit, and taxing power as further assurance that the obligations will be paid. Rose's 2019 expenditures from the general fund include payments for structural alterations to a firehouse and furniture for the mayor's office.