The liability for matured bonds payable should be recorded by a debt service fund only if a legal appropriation for that purpose exists in the proper amount.

Question

Quizplus · Accepted Answer

Even though bonds (and interest) may mature, a debt service fund may pay matured bonds only if a legal appropriation exists. However, the bond indenture normally contains wording which contractually obligates the issuer to make principal and interest payments when due.

The Liability for Matured Bonds Payable Should Be Recorded by a Debt