On October 1, the county issued a six-month, 6%, $200,000 bond anticipation note to provide temporary financing for a police station. The voters have approved the issuance of bonds to finance the project and the bonds are issued early in the following year. The county government was billed $150,000 during the year on its capital project and $125,000 was paid. The government should report Capital Projects Fund expenditures for the current year ending December 31 equal to

Question

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The Capital Projects Fund expenditures should be reported as the amount billed during the year, which is $150,000, regardless of the amount paid.

On October 1, the County Issued a Six-Month, 6%, $200,000