The City of Oxford, Mississippi (population just under 24,000) passed a bond issue for $2,500,000, 4.5 percent, semiannual interest, 10 year bonds to finance the construction of a second high school to be called Yoknapatawpha High, named in memory of the Pulitzer Prize winning author, William Faulkner. The State also contributed $110,000 for construction of the gymnasium. The contractor selected then submitted her contract for $2,080,000 to commence on January 2, 2019, with the projects estimated completion in late 2019.

1. Prior to the receipt of the bond proceeds, Oxford needed funds and went to United Southern Bank to borrow $600,000 in bond anticipation notes (BANs), at 5 percent, which were to be paid back using the proceeds of the $2,500,000 bond issue. The entry at the government-wide level to record the receipt of the bond anticipation notes would include a:

A. Credit to Other Financing Sourcesproceeds of BANs, $600,000.

B. Debit to Cash, $1,900,000.

C. Credit to Bonds Payable, $600,000.

D. Debit to Cash, $600,000.

2. Assume the bond issue commences, and the $2,500,000 proceeds are received. Oxford repays the bond anticipation notes in full along with $7,500 in interest. The entry recorded in the Capital Projects Fund to repay the bond anticipation notes would include a:

A. Debit to Other Financing UsesRetirement of BANs, $600,000.

B. Credit to Cash, $600,000.

C. Debit to Bond Anticipation Notes Payable, $600,000.

D. Debit to ExpensesInterest on Long-term Debt, $7,500.

3. Assume that at the conclusion of the construction project that the total costs totaled $3,200,000. This included some cost overruns. Assuming the high school passes all inspections and the asset is placed into service, the re-class entry to record the Building in the Capital Projects Fund would include:

A. a Credit to Buildings, $3,200,000.

B. a Debit to Buildings, $3,200,000.

C. No entry would be recorded in the Capital Projects Fund.

D. a Credit to Encumbrances2019, $3,200,000