Part of the proceeds of a governmental entity's general obligation bonds was used to pay for the cost of a new city hall as soon as construction was completed. The remainder of the proceeds was transferred to repay the bonds. Journal entries to record these transactions are needed in:

Question

Quizplus · Accepted Answer

The correct answer involves recognizing the nature of the transactions: paying for a new city hall (a capital project), repaying bonds (debt service), and the long-term nature of the debt and capital assets. These activities are recorded in the capital projects fund (for construction), the debt service fund (for bond repayment), and the general long-term debt and general capital assets account groups (for tracking the long-term financial position).

Part of the Proceeds of a Governmental Entity's General Obligation