Question

Raider City has established a legally separate public financing corporation to issue debt for the city’s capital projects. The corporation’s debt will be paid by the city. How should the public financing corporation be reported by the city?

Answer 1

Answer:

a blended component unit

Explanation:

Based on the information provided within the question it seems that the public financing corporation should be reported as a blended component unit. This term refers to a component that is completely intertwined with the government that is in term is part of that government, or in this case the city. Seeing as the public financing corporation is created and managed by the city, it can be said that it is part of the city.