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2 3 . Easterly City has $ 4 7 million of debt recorded in its schedule of changes in long - term obligations, made up
Easterly City has $ million of debt recorded in its schedule of changes in longterm obligations, made up of $ million of general obligation debt, $ million of compensated absences payable, $ million of claims and judgments, and $ million of obligations under capital leases. The state limits the amount of general obligation debt that can be issued by a city to percent of the assessed value of its taxable property. The assessed value of property in Easterly City is $ million. The citys legal debt margin is
a $ million.
b $ million.
c $ million.
d $ million.
A state created a housing authority to provide financing for lowincome housing. The authority issues bonds and uses the proceeds for that purpose. Currently the authority has outstanding $ million in bonds backed by the states promise to cover debt service shortages should they arise. The state constitution specifically limits the state to no more than $ million in general obligation debt. How can the state officials defend the $ million in debt outstanding?
a The debt is not general obligation debt.
b The state is only morally obligated for the debt.
c The debt is the debt of the authority, not the state.
d All of the above.
Debt that is issued by one entity but backed by the promise of another entity to make up any debt service deficiency is
a Committed debt.
b Overlapping debt.
c Conduit debt.
d Moral obligation debt.
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