1.Virginia City engaged in the following debt-related transactions during the year.Prepare the necessary journal entries to record the following transactions in the governmental fund financial statements.Clearly indicate if debt is short-term (S/T) or long-term (L/T).

a)In anticipation of property tax revenues to be received during the year, the city borrowed $2 million from a local bank payable in six months.The debt will be repaid from tax revenue.

b)The city issued $3 million in 6% demand bonds.Interest rates have risen since the bonds were issued and are forecasted to continue to rise.As of year-end, the city has entered into a valid take-out agreement.

c)The city issued $10 million in BANs while waiting for an approved bond issue to be completed. The bonds have been approved by the voters.The city fully believes the bonds will be issued by year-end. However, Virginia City has not been successful in entering into a financing agreementby the financial statement date and the bonds have not yet been issued.