5.The probable explanation of the illustrated journal entry is to record payment of cash to a bank trust department acting as fiscal agent for the payment of bond principal and interest.6.The recognition of depreciation of plant assets is appropriate for all assets of a governmentalentity's general capital assets account group except for certain infrastructure and inexhaustible(land and certain works of art) assets
7.The Investment in General Capital Assets from Gifts ledger account is credited for the current fair value of plant assets donated to a governmental entity for its general use, as opposed to use by a proprietary fund or a trust fund.8.A balance sheet is not issued for a governmental entity's general capital assets account group because an account group is not a
9.The journal entry in the Village of Marvell General Long-Term Debt Account Group is incorrect;Amount Available in Debt Service Fund should be
and Amount to Be Provided should be
10.For a capital lease for fire engines, a governmental entity's general fund records the appropriationsand expenditures for the lease payments; the general long-term debt account group records theliability under the capital lease; and the general capital assets account group records the leasedassets under the capital lease and the related depreciation.11.A liability for special assessment bonds is recorded in a governmental entity's general long-termdebt account group if the governmental entity is obligated in some manner for the payment of the bonds if the assessed property owners default.
SOLUTIONS TO EXERCISES
Journal entries for County of Larchmont Special Revenue Fund, July, 2005:Taxes Receivable
Current480,000Allowance for Uncollectible Current Taxes ($480,000x 0.015)7,200Revenues472,800To accrue property taxes billed and to provide for estimateduncollectible portion.Cash142,700Taxes Receivable
Current142,700To record collection of property taxes during July, 2005
Computation of present value of City of Garbo 6% serial bonds, July 1, 2005:July 1, 2003 payment [($200,000 + $60,000) x 0.925926*)]$240,741July 1, 2004 payment [($200,000 + $48,000) x 0.857339*)]212,620July 1, 2005 payment [($200,000 + $36,000) x 0.793832*)]187,344July 1, 2006 payment [($200,000 + $24,000) x 0.735030*)]164,647July 1, 2007 payment [($200,000 + $12,000) x 0.680583*)]144,284Present value of 6% serial bonds$949,636*From present value tables.
Journal entry for County of Pinecrest Capital Projects Fund, July 1, 2005:
The McGraw-Hill Companies, Inc., 2006
Modern Advanced Accounting, 10/e