Use the following information to answer questions
Several years ago, the City of Russell issued $7 million of 6% serial bonds at 101.Principal payments of $350,000 are due each June 30 for 20 years.Interest on the bonds is payable each December 31 and June 30.As of June 30, 2011, the City has not paid the June 30 principal and interest payment.
-Sue City has outstanding $5 million in general obligation term bonds used to finance the construction of the new City Library.Sue City has a June 30 fiscal year-end.Interest at 6% is payable each January 1 and July 1.The principal of the bonds is due 10 years in the future.The City budgeted the July 1, 2011 interest payment in the budget for the fiscal year ended June 30, 2011.On June 30, cash was transferred from the General Fund to the Debt Service Fund to make the required payment.The maximum amount of interest payable that may be included on the balance sheet of the debt service fund of Sue City at June 30 would be
A)$ -0-
B)$150,000.
C)$300,000.
D)$3,000,00.

Question

Use the following information to answer questions 
Several years ago, the City of Russell issued $7 million of 6% serial bonds at 101.Principal payments of $350,000 are due each June 30 for 20 years.Interest on the bonds is payable each December 31 and June 30.As of June 30, 2011, the City has not paid the June 30 principal and interest payment.
-Sue City has outstanding $5 million in general obligation term bonds used to finance the construction of the new City Library.Sue City has a June 30 fiscal year-end.Interest at 6% is payable each January 1 and July 1.The principal of the bonds is due 10 years in the future.The City budgeted the July 1, 2011 interest payment in the budget for the fiscal year ended June 30, 2011.On June 30, cash was transferred from the General Fund to the Debt Service Fund to make the required payment.The maximum amount of interest payable that may be included on the balance sheet of the debt service fund of Sue City at June 30 would be
A)$ -0-
B)$150,000.
C)$300,000.
D)$3,000,00.

Quizplus · Accepted Answer

The budgeted interest payment for the Sue City bonds was for July 1, 2011, which falls within the fiscal year ended June 30, 2011. Therefore, the payment was made before the fiscal year end and the maximum amount of interest payable would be $150,000 (6% of $5 million) as of June 30, 2011.

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