The journal entry to set up an ordinance which is fully funded from the Capital Improvement Fund would include a credit to the account entitled 'Estimated Proceeds of Bonds and Notes Authorized but not issued.'

The journal entry to set up an ordinance which is fully funded from the Capital Improvement Fund would include a credit to the account entitled 'Estimated Proceeds of Bonds and Notes Authorized but not issued.'

• A. Not stated
• B. True
• C. Not applicable
• D. False

Answer: (D)

When a capital project is funded entirely from the Capital Improvement Fund, there are no unissued bond proceeds to anticipate. The account “Estimated Proceeds of Bonds and Notes Authorized but not issued” exists to record financing sources from bonds that have been authorized but not yet issued. If the ordinance is fully funded from the CIPF, you’re not recognizing any unissued bond proceeds, so you would not credit that bond proceeds account. Instead, the funding comes from the CIPF resources themselves, recorded through the appropriate CIPF-to-project transfer or appropriation. So crediting the “Estimated Proceeds of Bonds and Notes Authorized but not issued” would be inappropriate in this scenario.

When a capital project is funded entirely from the Capital Improvement Fund, there are no unissued bond proceeds to anticipate. The account “Estimated Proceeds of Bonds and Notes Authorized but not issued” exists to record financing sources from bonds that have been authorized but not yet issued. If the ordinance is fully funded from the CIPF, you’re not recognizing any unissued bond proceeds, so you would not credit that bond proceeds account. Instead, the funding comes from the CIPF resources themselves, recorded through the appropriate CIPF-to-project transfer or appropriation. So crediting the “Estimated Proceeds of Bonds and Notes Authorized but not issued” would be inappropriate in this scenario.