Which of the following is true regarding accounting for investments of permanent funds?

Question

Quizplus · Accepted Answer

GASB requires that investments with determinable fair values be recorded at fair value at year end and unrealized gains reported along with realized gains as "Investment Income-Net Increase in Fair Value of Investments."
Use the following to answer the next four questions:
On April 1, 2017, the City of Southern Ponds issued $4,000,000 in 4% general obligation, tax supported bonds at 101 for the purpose of constructing a new police station. The premium was transferred to a debt service fund. A total of $3,990,000 was used to construct the police station, which was completed before December 31, 2017, the end of the fiscal year. The remaining funds were transferred to the debt service fund. The bonds were dated April 1, 2017, and paid interest on October 1 and April 1. The first of 20 equal annual principal payments of $200,000 is due April 1, 2018.

Which of the Following Is True Regarding Accounting for Investments