Lesson 75 - Advanced Accounting Course

Lesson 75: Municipal Bonds and Public Sector Finance

🏛️ What Are Municipal Bonds?

Municipal bonds (also called "munis") are debt securities issued by government entities, like:

• Cities 🏙️
  
  

• States 🌆
  
  

• School districts 🏫
  
  

• Transportation authorities 🚉
  
  

They are used to raise money for public projects like building schools, roads, hospitals, and water systems.

🧠 In simple terms: the government borrows money from investors and promises to pay it back with interest.

💰 Key Features of Municipal Bonds

🧩 Types of Municipal Bonds

📊 Accounting for Municipal Bonds (Public Sector) 

🧾 Note: Government entities follow GASB standards (Governmental Accounting Standards Board).

📈 Why Do Governments Use Bonds?

• Fund large infrastructure projects without raising taxes immediately
  
  

• Spread costs over time ⏳
  
  

• Support community development 🏗️
  
  

🧠 Risks and Considerations

✅ Summary

• Municipal bonds are essential tools for financing public projects
  
  

• They are popular because of their tax advantages and social impact
  
  

• Accounting involves tracking debt issuance, interest payments, and fund usage under GASB standards