Marloweville, with 20000, residents, is deciding how to finance
the construction of a new municipal golf course that will enhance
both recreation and tourism in the area. The construction costs of
the golf course is $10,000,000. By law all proceeds from debts
issuance are placed in the Marlowevilles capital projects fund and
all capital expenditures are made using this fund.
1. Show how Marloweville would record the transactions if it
were to issue a $10,000,000 bond and then use the proceeds to
construct the golf course.
2. Show how Marloweville would record the transactions if it
were to finance 50% of the contruction with a miniciple bond and
50% through a transfer from the Rainy Day Fund (a govermental
fund)
3. If at the end of the fiscal year, Marloweville makes a loan
repayment of $250,000 plus a $50,000 interest payment, the total
expenditure for the transaction will equal
a.0
b.250000
c.50000
d300000
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