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23 January, 08:52

A local government sells bonds having a face value of $1,000,000 at par. The bond proceeds will be accounted for in a Capital Projects Fund. What account will be credited to offset the debit to cash?

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  1. 23 January, 10:13
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    A) Other financing sources

    Explanation:

    Other financing sources and uses account has to be created to include operating transfers and proceeds from debt transactions. Since the issuing of bonds is a debt transaction, their proceeds must be included in this account. This account can only be used to record non-operating revenues and expenditures.
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