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12-7. 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
12-7. 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 million. By law, all proceeds from debt issuance are placed in Marloweville's Capital Projects Fund, and all capital expenditures are made using this fund.
- Show how Marloweville would record the transaction(s) if it were to issue a $10 million bond and then use the proceeds to construct the stadium.
- Show how Marloweville would record the transaction if it were to finance 50 percent of the construction with a municipal bond and 50 percent through a transfer from the Economic Development Fund (a governmental fund).
- If, at the end of the fiscal year, Marloweville makes a loan repayment of $250,000 plus a $50,000 interest payment, the total expenditure for the transaction will equal
- $0.
- $250,000.
- $50,000.
- $300,000.
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