A governmental entity issued bond anticipation notes BANs during the year for a major capital project. The BANs were refinanced with long-term general obligation bonds before the end of the fiscal year. The journal entry to record the retirement of the BANs in the Capital Projects Fund the governmental entity should include

Question

Quizplus · Accepted Answer

The retirement of the BANs represents an Other Financing Use, as the Capital Projects Fund used the proceeds from the long-term general obligation bonds to pay off the BANs. There would not be a fund liability or revenues associated with the retirement of the BANs, as it only represents a shift in financing sources.

A Governmental Entity Issued Bond Anticipation Notes BANs During the Year