Question - General Long-term Liability and Capital Asset Transactions

The Village of Nassau issued a 3-year, 6 percent note in the amount of $ 100,000 to finance the purchase of vehicles for the Public Works Department.

Required:

1. Record the issuance of the $100,000 note in the General Fund and the governmental activities general journals.

2. Record the purchase of vehicles in the amount of $100,000 in the General fund and governmental activities general journals.

3. Explain why the accounting treatment is different in the general Fund and governmental activities general journals.