C is corrent because per GASB
Codification Section 1600, principal and interest on general obligation long-term debt are typically not recognized as expenditures until due. This is an exception to the modified accrual basis because interest is not being recognized as an expenditure in the accounting period in which the fund liability is incurred. Thus, the correct answer is calculated as follows:
Debt principal matured $2,000,000
Interest on matured debt 900,000
Total expenditures $2,900,000
A is incorrect. Principal and interest on general obligation long-term debt are typically not recognized as expenditures until due.
A is incorrect. Principal and interest on general obligation long-term debt are typically not recognized as expenditures until due.
D is incorrect. Principal and interest on general obligation long-term debt are typically not recognized as expenditures until due.
