The City of Amarillo is authorized to issue $ 5,700,000, 5 percent regular serial bonds in 2017
Question:
The City of Amarillo is authorized to issue $ 5,700,000, 5 percent regular serial bonds in 2017 for the construction of a new exit off the interstate highway within city limits. The bonds mature in equal annual amounts beginning on January 1, 2018 for 10 years and pay interest on January 1 and July 1. The city is required to use all accrued interest and premiums to service the debt. The funds to pay the interest will be transferred from the General Fund. The county's fiscal year end is December 31.
a. Prepare the budgetary entries for 2017 assuming that the bonds were scheduled to be issued on January 2. Assume that the January 1, 2018 principal and interest payments will be included in the 2018 budget. (If no entry is required, please note) Do not round intermediate calculations.
Record the budget transaction.
General Journal | Debit | Credit | |
Debt Service Fund | |||
b. The bonds were sold on February 1, 2017 at 101. Prepare the journal entries needed to record the issuance of the bonds, including the entries required in the debt service fund and any entries required in the governmental activities general ledger at the government-wide level. (If not entry is required, please note) Do not round intermediate calculations.
1. Record the premium and interest on issuance of bonds.
General Journal | Debit | Credit | |
Debt Service Fund | |||
Governmental Activities | |||
c. Prepare the entry required to reflect the transfer of funds from the General Fund in the debt service fund. (You may ignore the entry in the General Fund.) (If no entry is required, please note) (Do no round intermediate calculations)
Record transfer of funds.
General Journal | Debit | Credit | |
Debt Service Fund | |||
d. Prepare the journal entries needed to record first interest payments made on July 1, including the entries required in the debt services fund and any entries required in the governmental activities general ledger at the government-wide level. Assume that the straight-line method is used for premium amortization. (If the no entry is required for a transaction/event, select "no journal entry required". Do not round intermediate calculations.
Record the first interest payment made on July 1.
General Journal | Debit | Credit | |
Debt Service Fund | |||
Governmental Activities | |||
Accounting for Governmental and Nonprofit Entities
ISBN: 978-0078025822
17th edition
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson