Record the amount due to the special assessment bondholders

Reference no: EM131970580

Problem

Residents of Green Acres, a gated community located in the City of Foothills, voted to form a local improvement district to fund the construction of a neighborhood park. The city agreed to administer the bonded debt; however, residents of Green Acres are solely responsible for repaying the bond issue. The following events are related to the special assessment park debt:

1. On January 1, 2017, the city assessed levies totaling $5,000,000 on properties within Green Acres. The levies are payable in 10 equal annual installments, beginning in the current year, with 5 percent interest due on unpaid installments.

2. All assessments associated with the current year's installment were collected by December 31, 2017, as was the interest due on the unpaid installments. A portion of assessments receivable equal to the 2018 installment was reclassified as current.

3. On January 1, 2018, the first principal payment of $500,000 was made to bondholders as was interest on the debt.

What type of fund should the City of Foothills use to account for the special assessment debt?

Prepare journal entries for each of the foregoing events for the city. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1) Record the amount due to the special assessment bondholders.
2) Record the amount collected against assessment and interest payable.
3) Record the installment for 2018 reclassified as current.
4) Record the principal and interest paid to the bondholders.

Reference no: EM131970580

Questions Cloud

What is the maximum amount peggy and bob could give directly : What is the maximum amount Peggy and Bob could give directly to their grandchildren without incurring a generation-skipping transfer tax?

What do your answers illustrate about the eoq model : EOQ analysis Tiger Corporation purchases 1,200,000 units per year of one component. The fixed cost per order is $23. The annual carrying cost of the item.

What are roches existing operating cycle : In terms of negotiated financing requirements, what is the annual cost of Roche Publishing Company's operational inefficiency?

Relationship between amount of enhancer and ranking by panel : Comment on the relationship between the amount of enhancer and the ranking by the panel. Clearly justify your claim.

Record the amount due to the special assessment bondholders : Record the amount due to the special assessment bondholders. Record the amount collected against assessment and interest payable.

Comment on the difference between the two intervals : In response to the belief that house prices have changed over the past year an estate agent has drawn a random sample of 100 completed house

How would you determine the knowledgeable financial expert : Several times in the reading, the phrase "knowledgeable financial expert" has come up as a necessary trait for at least one of the Board members.

List some of the problems with the use of roe : List some of the problems with the use of ROE, and in your own words, explain the nature of these problems.

Explain what weight should it use for debt : If the company has a $45.4 million market value of equity, what weight should it use for debt when calculating the cost of capital?

User Account

All Pages