The City of Castle Rock issued bonds at par for the construction of a new city office building. Receipt of the bond proceeds would result in journal entries in which funds?

Question

Quizplus · Accepted Answer

The Capital Projects Fund is used to account for the construction of long-term capital assets, such as the new city office building. Therefore, this fund would be the appropriate fund to record the receipt of the bond proceeds. The Debt Service Fund, on the other hand, is used to account for the payment of principal and interest on long-term debt, so it would not be used to record the receipt of the bond proceeds.

The City of Castle Rock Issued Bonds at Par for the Construction