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Voters in Lincoln School District approved the construction of a new high school and approved an $8 million bond issue with a stated rate of interest of 6% to fund the construction.Bids were received and the low bid was $8 million.When the bonds were issued, they sold for face value less bond underwriting fees of $.5 million.The School Board voted to fund the balance of the construction by a transfer from the general fund.
-The entry in the capital projects fund to record the receipt of the bond proceeds would be
A)Debit Cash $7.5 million; Credit Bonds payable $7.5.
B)Debit Cash $7.5 million; Credit Other financing sources $7.5.
C)Debit Cash $7.5 million and Expenditures $.5 million; Credit Bonds payable $8 million.
D)Debit Cash $7.5 million and Expenditures $.5 million; Credit Other financing sources $8.

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Use the following information to answer questions 
Voters in Lincoln School District approved the construction of a new high school and approved an $8 million bond issue with a stated rate of interest of 6% to fund the construction.Bids were received and the low bid was $8 million.When the bonds were issued, they sold for face value less bond underwriting fees of $.5 million.The School Board voted to fund the balance of the construction by a transfer from the general fund.
-The entry in the capital projects fund to record the receipt of the bond proceeds would be
A)Debit Cash $7.5 million; Credit Bonds payable $7.5.
B)Debit Cash $7.5 million; Credit Other financing sources $7.5.
C)Debit Cash $7.5 million and Expenditures $.5 million; Credit Bonds payable $8 million.
D)Debit Cash $7.5 million and Expenditures $.5 million; Credit Other financing sources $8.

Quizplus · Accepted Answer

The entry records the cash received ($7.5 million) and the underwriting fees as expenditures ($.5 million), with the total bond proceeds credited to other financing sources ($8 million).

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