1. Although many governments prepare budgets for both capital projects and debt service funds and integrate them into their accounts, budgetary control over these funds is not as essential as it is for other governmental funds. Do you agree? Explain. If budgets are prepared for capital projects funds, in what significant way may they differ from those prepared for other funds?

2. What is the capital projects fund used for?

3. When bonds are issued for capital projects, premiums are generally not accounted for as the mirror image of discounts. Why not? What is a bond premium and what is a bond discount? What do they indicate?

4. It is sometimes said that in debt service funds the accounting for interest revenue is inconsistent with that for interest expenditure. Explain. What is the rationale for this seeming inconsistency?

5. A government issues bonds at a discount. Where would the government report the discount on its (a) fund statements and (b) governmentwide statements?

6. This week we discuss capital projects and debt service. Please choose one of these questions to answer fully with references and examples. Then respond to two or your colleague's posts. What typically occurs in a capital projects fund; what are common journal entries for this fund? What is a debt service fund; what are the common activities in this fund; and what are the typical journal entries?