Lewis County uses a fiscal agent to distribute payments of interest to bondholders. Interest payments are due on July 1 of each year. The fiscal agent requires the county to transfer by June 20 the cash necessary to make the July 1 payments.
-How should Lewis County account for the amount transferred on June 20 if the county maintains its books and records in a manner that facilitates the preparation of fund financial statements?
A) Debit Cash with fiscal agent and expenditures; Credit Cash and interest payable.
B) Debit Cash with fiscal agent and interest expense; Credit Cash and interest payable.
C) Debit Expenditures; Credit Cash.
D) Debit Cash with fiscal agent; Credit Cash.

Question

Lewis County uses a fiscal agent to distribute payments of interest to bondholders.  Interest payments are due on July 1 of each year.  The fiscal agent requires the county to transfer by June 20 the cash necessary to make the July 1 payments. 
-How should Lewis County account for the amount transferred on June 20 if the county maintains its books and records in a manner that facilitates the preparation of fund financial statements?
A) Debit Cash with fiscal agent and expenditures; Credit Cash and interest payable.
B) Debit Cash with fiscal agent and interest expense; Credit Cash and interest payable.
C) Debit Expenditures; Credit Cash.
D) Debit Cash with fiscal agent; Credit Cash.

Quizplus · Accepted Answer

The Answer of Lewis County uses a fiscal agent to distribute payments of interest to bondholders.  Interest payments are due on July 1 of each year.  The fiscal agent requires the county to transfer by June 20 the cash necessary to make the July 1 payments. 
-How should Lewis County account for the amount transferred on June 20 if the county maintains its books and records in a manner that facilitates the preparation of fund financial statements?
A) Debit Cash with fiscal agent and expenditures; Credit Cash and interest payable.
B) Debit Cash with fiscal agent and interest expense; Credit Cash and interest payable.
C) Debit Expenditures; Credit Cash.
D) Debit Cash with fiscal agent; Credit Cash.

Lewis County Uses a Fiscal Agent to Distribute Payments of Interest