Author Question: A local government purchased land to be used for a new city hall to be built within the next five ... (Read 82 times)

james9437 · **on:** Jul 5, 2018

A local government purchased land to be used for a new city hall to be built within the next five years. The purchase price was for the land's fair value, 1,500,000 .

The government financed the required 150,000 down payment by securing a short-term note with a local lending institution. The remaining 1,350,000 was financed by issuing certificates of participation. Costs incurred in issuing the certificates of participation totaled 60,000 . The land should be capitalized in the General Capital Assets account in the amount of
A. 1,350,000.
B. 1,410,000.
C. 1,500,000.
D. 1,560,000.

Question 2

If an owner wanted to know how money flowed into and out of the company, which financial statement would theowner use?
a. income statement
b. statement of cash flows
c. balance sheet
d. statement of retained earnings