On December 31, Calla Township paid a contractor $4 million for the total cost of a new police building built during the year. Financing was by means of a $3 million general obligation bond issue sold at face amount on December 31, with the remaining $1 million transferred from the general fund. What amount should Calla record as revenues in the capital projects fund in connection with the bond issue proceeds and the transfer?

Question

Business

Joe Shannon

7 June, 01:49

On December 31, Calla Township paid a contractor $4 million for the total cost of a new police building built during the year. Financing was by means of a $3 million general obligation bond issue sold at face amount on December 31, with the remaining $1 million transferred from the general fund. What amount should Calla record as revenues in the capital projects fund in connection with the bond issue proceeds and the transfer?

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Answers (1)

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Ross Meyer · Answer 1

No Revenue will be recorded

Explanation:

The calla paid $4 million and that amount was finance through a bond.

Therefore capital project revenue has nothing to do with loan obligations. If in question, it was given that revenue that call received from capital project then we could have easily determined.