The City of Twin Falls issued $5 in special assessment bonds to finance major reconstruction of the turbines and facilities used in generating electricity that is sold to the citizens in the surrounding area.The electric power distribution activities are accounted for in an Enterprise Fund.The Enterprise Fund will service the debt.If the City is legally obligated for the debt, the appropriate entry in the City's Electric Enterprise Fund to record this event is

Question

Quizplus · Accepted Answer

The City is legally obligated for the debt, so the debt should be recorded in the Electric Enterprise Fund. The debt is a liability, so it should be recorded as a credit to Bonds payable. The plant assets are being financed by the debt, so they should be recorded as a debit to Plant assets.

The City of Twin Falls Issued $5 in Special Assessment