1. Prepare journal entries to record the following transactions for Cosmotown for 2012. The Town records encumbrances only for its Supplies appropriation. (25 pts)

a. Cosmotown adopted the following budget for the year:

Revenues:
Property taxes	$275,000
Licenses and fees	35,000
Appropriations:
Salaries	255,000
Supplies	40,000
Interest	1,500

b. Property tax bills amounting to $275,000 were sent to the property owners.

c. Because property taxes were not due to be received for several months and the town needed cash to finance its activities, Cosmotown borrowed $100,000 on tax anticipation notes from a local bank.

d. Cosmotown paid salaries in the amount of $75,000.

e. The town sent out two purchase orders for supplies: purchase order A for $6,000 and purchase order B for $5,000.

f. The town received $130,000 from property owners in payment of their property taxes.

g. Cosmotown repaid the bank on its borrowing in transaction c. The amount paid was $101,000, which included interest of $1,000.

h. The town collected $15,000 for fishing licenses.

i. The town received the supplies ordered on purchase order A in transaction e. All the supplies arrived in good condition and the invoice for $6,100 was approved for payment.

j. The town Treasurer paid the invoice in transaction i. for $6,100.