Question description

The
accounting for bond premiums is not the mirror image of that for bond
discounts.
Pacific
Independent School District issued $100 million of general obligation bonds to
finance the construction of new schools. The
bonds were issued at a premium of 600000.
1. 
Prepare
the capital projects funds journal entries to record the issue of the bonds and
transfer of the premium to an appropriate fund.
2. 
Suppose,
instead, that the bonds are issued at a discount of $600,000 but that the
project still cost $$100 million. Prepare the appropriate entries.
a. 
Contrast
the entries in this part and in part 1.
b. 
Indicate
the options available to the school district and tell how they affect the
entries required of the district.
c. 
Suppose
the government chose to finance the balance of the project with general
revenues. Prepare the appropriate capital projects fund entry. 

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