On April 1,2014,a local government issued bonds in the amount of $1,500,000.The bonds were issued at par and carried an interest rate of 5%,payable October 1 and April 1.When moving from the change in fund balances in the governmental funds Statement of Revenues,Expenditures,and Changes in Fund Balances to the change in net Assets in the governmental funds column of the Statement of Activities,both for the fiscal year ended June 30,2014,the effect for the interest accrual only would be:

Question

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The interest accrual for the period from April 1 to June 30 (3 months) would be $1,500,000 * 5% * (3/12) = $18,750. This amount would decrease the net assets as it represents an expense accrued but not yet paid.

On April 1,2014,a Local Government Issued Bonds in the Amount