A government has $3,000,000 of 6%, 10-year general obligation bonds outstanding. The bonds were issued on November 1, 20X8 to finance construction of a general capital asset. Interest is payable semiannually on October 31 and April 30. What amount of debt service expenditures should the government report for the year ended December 31, 20X8?

Question

Quizplus · Accepted Answer

The government should report $0 of debt service expenditures for the year ended December 31, 20X8, as the bonds were not outstanding for the full year and interest is not payable until October 31, 20X9.

A Government Has $3,000,000 of 6%, 10-Year General Obligation Bonds