Tthe mirror image of that for bond discounts

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The accounting for bond premiums is not the mirror image of that for bond discounts.

Paci?c Independent School District issued $100 million of general obligation bonds to ?nance the construction of new schools. The bonds were issued at a premium of $600,000.

1. Prepare the capital projects fund journal entries to record the issue of the bonds and the 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 costs $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 ?nance the balance of the project with general revenues. Prepare the appropriate capital  projects  fund entry. 

Reference no: EM13221325

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