Author Question: The normal balance of a capital account a. can be either a debit or a credit balance. b. is a ... (Read 126 times)

jilianpiloj · **on:** Jul 5, 2018

The normal balance of a capital account
a. can be either a debit or a credit balance.
b. is a debit balance.
c. is a credit balance.
d. is called a footing.

Question 2

A city sells 5 million of 6 ten-year general obligation bonds on April 1, 2013 . The first installment of debt principal (250,000) is due to be paid on September 30, 2013 .

What entry should the city make on September 30, 2013 in the Debt Service Fund regarding the bond principal?
a. It should recognize a 250,000 liability for Matured bonds payable.
b. It should reduce the 5 million long-term liability by 250,000.
c. It should do nothing in the Debt Service Fund, but it should reduce Bonds payable by 500,000 in the Capital Projects Fund
d. It should make no entry anywhere until the principal is actually paid.