NFP - Test 2 - Ch 8 Exam Questions and Answers 100% Pass

NFP - Test 2 - Ch 8 Exam Questions and Answers 100% Pass Which of the following is true with respect to bankruptcy - Many major cities have avoided bankruptcy by being placed under the control of financial control boards by their state governments. A government issues $1M in 30-year, 6% coupon bonds at a discount of $27,092. The bonds were sold to yield 6.2%. At what amount would the bonds be reported (net) in the government-wide statement of net assets and governmental fund balance sheet immediately upon issuance? - Government Wide: $972,908 (1M - Discount) Governmental: $0 The government issues the bonds described in question 2. It makes its first semiannual interest payment of $30,000. How much interest expense/expenditure would it likely have to report in its government wide 2 Katelyn Whitman, All Rights Reserved © 2025 and governmental fund statements? - Government Wide: $30,160 ($30K + $160(amortization)) Governmental: $30K The government makes subsequent payments interest payments. Reported interest expense/expenditure in its government wide and governmental fund statements will: - Government Wide: Increase Governmental: Stay the same Suppose a government issues $1M in bonds at a premium of $50K. It temporarily invest the proceeds of $1,050,000 in U.S. Treasury bonds having a face value of $1M. At what value would the government report the bonds payable and the investment in bonds in its government wide statements subsequent to the date of th transactions? - Bonds Payable: Amortized Cost Investment in Bonds: Market Value 3 Katelyn Whitman, All Rights Reserved © 2025 Which of the following is true of demand bonds? - They give the bondholder the right to demand repayment prior to maturity. Demand bonds should be reported as governmental fund liabilities if - If the government has not entered into a take-out agreement. A city issues bond anticipation notes on Oct 21, 2011. It refunds the notes with a 30 year bonds in Jan 2012. In its financial statements for the year ending Dec 31, 2011, which are issued in April 2012, it should report the bond anticipation notes as obligations - In its government-wide statement of net assets but not its governmental fund balance sheet. A city issues revenue anticipation notes on oct 21, 2011. It repays the notes on Jan 2012. In its F/S for the year ending Dec 31, 2011, which are issued in April 2012, it should report the revenue anticipation notes as obligations in - In both the government-wide statement of net assets and a governmental fund balance sheet.