Sugar city issued $2 million of bonds to fund the construction of a new city office building. the bonds have a stated rate of interest of 5% and were sold at 101. which of the following entries should be made in the capital projects fund to record this event?
a) debit cash $2.02 million; credit bonds payable $2 million and premium on bonds payable $.02 million
b) debit cash $2.02 million; credit bonds payable $2 million and other financing sources $.02 million.
c) debit cash $2.02 million; credit other financing sources $2.02 million.
d) debit cash $2.02 million; credit other financing sources $2 million and revenue $.02 million.

Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers.firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?