17. The following events occurred in the City of Boonebury during 2015. On January 1, the...

 

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17. The following events occurred in the City of Boonebury during 2015. On January 1, the city sells $600,000 of general obligation bonds at 101. The premium is to be used to pay interest. The bonds have a 6% stated interest rate and mature in 20XX. Interest is payable on July 1 and January 1. a. b. On June 30, enough cash is transferred from the General Fund to service the bonds described in a. A check is written to the fiscal agent handling the bonds on June 30. Notification is received from the fiscal agent on August 1 that interest has been paid to the bondholders. On September 30, enough cash is transferred from the General Fund to retire $150,000 of a serial bond issue plus $3,000 of interest. The cash is immediately forwarded to the fiscal agent. Required: Prepare the journal entries necessary to record the events in the Debt Service Fund. The City of Boonebury is a calendar-year city. (20 points) d. 17. The following events occurred in the City of Boonebury during 2015. On January 1, the city sells $600,000 of general obligation bonds at 101. The premium is to be used to pay interest. The bonds have a 6% stated interest rate and mature in 20XX. Interest is payable on July 1 and January 1. a. b. On June 30, enough cash is transferred from the General Fund to service the bonds described in a. A check is written to the fiscal agent handling the bonds on June 30. Notification is received from the fiscal agent on August 1 that interest has been paid to the bondholders. On September 30, enough cash is transferred from the General Fund to retire $150,000 of a serial bond issue plus $3,000 of interest. The cash is immediately forwarded to the fiscal agent. Required: Prepare the journal entries necessary to record the events in the Debt Service Fund. The City of Boonebury is a calendar-year city. (20 points) d.

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