Question

A government issued general obligation bonds to finance the construction of a new fire station. In the current year, the government incurred $107,000 of interest expense on the debt. This amount will be reported on the government-wide statement of activities as________.

Answer 1

Answer: The correct answer is "Interest expenses of the governmental activities.".

Explanation: This amount will be reported on the government-wide statement of activities as interest expenses of the governmental activities since it corresponds to interest expenses paid for the issuance of debt to finance government activities.