Which of the following is a true statement about governments that issue tax-supported debt to finance capital projects?

Question

Quizplus · Accepted Answer

Premiums on bonds issued are recorded as an other financing source of the debt service fund. This is because the premiums represent additional funds received by the government that are not part of the actual principal amount of the bond. These funds can be used to pay down the debt or fund other capital projects. Accrued interest is typically recorded as an other financing use in the capital projects fund, and premiums on bonds issued must be amortized in the debt service fund. Most states do permit bonds to be issued at a premium.

Which of the Following Is a True Statement About Governments