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Finance officials for the City of Sansville determine that a significant revenue shortfall will occur in its General Fund during the year. To temporarily make
Finance officials for the City of Sansville determine that a significant revenue shortfall will
occur in its General Fund during the year. To temporarily make up for the shortfall, city officials
borrow $500,000 using a Tax Anticipation Note (TAN) on June 30, 2021 that is due to be repaid
on March 31, 2022 with interest of 2 percent per annum. For what amount should the city debit
the Expendituresinterest account at its fiscal year-end on December 31, 2021?
a. $0
b. $5,000
c. $7,500
d. $10,000
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