Marloweville, with 20,000 residents is deciding how to finance the construction of a new municipal stadium that will enhance both recreation and tourism in the area, The construction cost of the stadium is $10,000,000. By law all proceeds from debt issuance are places in Marloweville’s captial projects fund, and all capital expendictures are made using this fund.
1. Show how Marloweville would recorded the transactions if it were to issue a 10,000,000 bond and then use the proceeds to construct the stadium
2. Show how Marloweville would record the transaction if it were to finance 50% of the construction with a municipal bond and 50% thru a transfer from economic development fund (a government fund)
3. If at the end of the fiscal year, Marloweville makes a loan repayment of 250,000 plus a 50,000 intrest payment the total expenditure for the transaction will equal
a. 0
b. 250,000
c. 50,000
d. 300,000
