The City issued $2 million in general obligation bonds to acquire a fleet of vehicles for the Central Motor Pool Internal Service Fund At the date of issue, the appropriate entry in the proprietary fund is a $ 2 million debit to cash and a $2 million credit to

Question

Quizplus · Accepted Answer

When bonds are issued, the appropriate entry is a debit to cash and a credit to Bonds Payable. Option B is incorrect because Contribution/Contributed Capital (Revenues) is typically used in government funds, not proprietary funds. Option C is incorrect because the Schedule of Changes in Long-Term Obligations is used in government-wide financial statements, not in proprietary funds. Option D is incorrect because an entry must be made in the proprietary fund when bonds are issued.

The City Issued $2 Million in General Obligation Bonds to Acquire