The City of San Jose built a new city hall and financed construction by issuing bonds due in installments over the next 30 years.The bond principal and interest will be paid by a special tax levied on property in the City.The revenue received from this special tax should be accounted for in which of the following funds?

Question

Quizplus · Accepted Answer

The revenue received from the special tax levied on property in the City to pay the bond principal and interest should be accounted for in the Debt service fund, which is used to account for the accumulation of resources and the payment of principal and interest on general long-term liabilities. The other options (A, B, and C) are not appropriate for this purpose. The General fund is used to account for the City's ongoing operations and day-to-day transactions, while the Internal service fund is used to account for services provided by one department to other departments within the same government. The Capital project fund is used to account for the acquisition or construction of major capital facilities or infrastructure projects.

The City of San Jose Built a New City Hall