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The citizens of a specific area of the City of Arlington approved the construction of sidewalks in their residential neighborhood and approved a $1 million bond issue to finance construction of those sidewalks.The citizens agreed to a special assessment on their property for 20 years in an amount sufficient to pay principal and interest on the bonds.The City will oversee the construction of the sidewalks and act as agent for servicing the debt.If the special assessment is not sufficient to make the principal and interest payments, the City will assume the obligations.
-When the City of Arlington levies the special assessment tax, the best entry would be

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Use the following information to answer questions 
The citizens of a specific area of the City of Arlington approved the construction of sidewalks in their residential neighborhood and approved a $1 million bond issue to finance construction of those sidewalks.The citizens agreed to a special assessment on their property for 20 years in an amount sufficient to pay principal and interest on the bonds.The City will oversee the construction of the sidewalks and act as agent for servicing the debt.If the special assessment is not sufficient to make the principal and interest payments, the City will assume the obligations.
-When the City of Arlington levies the special assessment tax, the best entry would be

Quizplus · Accepted Answer

When the special assessment tax is levied, it creates a liability for the property owners who now owe this assessment to the city. Therefore, the best entry would be to Debit Special Assessments Receivable (an asset account) and Credit Liability (a liability account). This entry recognizes the amount that the city expects to collect from property owners and the obligation the city has to repay the bondholders.

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