Question

Pulling County has a December 31 fiscal year-end. In November, the County borrowed $8 million from a local bank, due in six months at 6% interest, to finance general government operations. The county pledges property tax revenues to secure the loan. At year-end, how should the bank note be displayed in the governmental fund financial statements? a. Nothing in the General Fund; Nothing in a Schedule of Changes in Long-Term Obligations. b. General Fund--$8 million in Other Financing Sources; Nothing in a Schedule of Changes in Long-Term Obligations. c. General Fund--$8 million in Other Financing Sources; $8 million in a Schedule of Changes in Long-Term Obligations. d. General Fund--$8 million in Notes Payable; Nothing in a Schedule of Changes in Long-Term Obligations.

Answer 1

Answer: the correct answer is d. General Fund--$8 million in Notes Payable; Nothing in a Schedule of Changes in Long-Term Obligations.

Explanation:

The money is borrowed to be paid in just 6 months that's why the general Fund is $ 8 million in "notes payable" and it is "nothing in long term obligations" because it is a "short term obligation "