EX$.8-3$

Government debts may be reported differently in governmental and government$-$wide statements.

The Alpine school district engaged in the following transactions in its fiscal year ending August $31,20$X$1.$ By law, the district is required to establish a capital projects fund to account for school construction projects and a debt service fund to account for resources legally restricted to the payment of long$-$term principal and related interest.

On March $1,$ it issued $$40$ million in general obligation bonds to finance the construction of a new junior high school. The bonds were to mature in $20$ years $(40$ periods$)$ and had a coupon rate of $4$ percent per year $(2$ percent per semiannual period$).$ They were sold for $$38,924,728($a discount of $$1,075,272),$ a price that reflected an annual yield of $4\mathrm{.}2$ percent $(2\mathrm{.}1$ percent per period$).$

On August $31$ the district made its first interest payment of $$800,000.$

During the year the builder with whom the district contracted to construct the building completed approximately $10$ percent of the building and billed the district for $$4$ million.

On August $31,$ the district issued $$10$ million in bond anticipation notes to finance improvements to its athletic facilities. By the time the district issued its fiscal year$-$end $20$X$1$ financial statements in December $20$X$1,$ it still had not refinanced these notes and had not yet started construction on the facilities.

In June the district issued $$2$ million in tax anticipation notes. It repaid these notes in September. Inter$-$