Wood City, which is legally obligated to maintain a debt service fund, issued the following general
obligation bonds on July 1, 1992:
Term of bonds 10 years
Face amount $1,000,000
Issue price 101
Stated interest rate 6%
Interest is payable January 1 and July 1. What amount of bond premium should be amortized in Wood's
debt service fund for purposes of fund financial reporting for the year ended December 31, 1992?
I know the answer is $0. since you are not supposed to amortize for govenmental fund reporting purposes.
But I am still a little fuzzy with how this premium is gonna to report? On governmental wide f/s? exactly in the same fashion as commercial purposes ?
Another question is: does governmental fund f/s report the current portion of this bond or nothing at all? if the current portion, how much?
Sorry. Very confused with this. Thanks.
I got it. Thank you.
Are the discount or premium reported in governmental wide f/s ?
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