A government had $7,000,000 of 5%, six-month bond anticipation notes outstanding at the end of the fiscal year. As of this date, the government has completed all legal procedures and the notes will be refinanced to a term of ten years the following month. The BAN liability reported in the Capital Projects Fund as of the end of the fiscal year should be

Question

Quizplus · Accepted Answer

The bond anticipation notes (BANs) are expected to be refinanced into long-term debt, so they are not reported as a liability in the Capital Projects Fund, which is used for short-term financing.

A Government Had $7,000,000 of 5%, Six-Month Bond Anticipation Notes