Question - The Village of Florence is preparing its Government-Wide financial statements from its Fund financial statements. The Village records an outstanding Bond Liability with a book value of $200,000 at the beginning of the year that requires a principal payment of $10,000 per year. Its records also indicate that it borrowed $40,000 on new Bonds during the year.
Required:
a. What two journal entries must the Village include in its Government-Wide financial statement spreadsheet relating to its Bond Liability?
b. Why must these entries be included in the spreadsheet?