25 Exercise 6-25 (Static) Term Bond Debt Service Fund Transactions [LO 6-5] 0.57 points Skipped On July 1, 2022, the first day of its 2023 fiscal year, the Town of Bear Creek Issued at par $2,000,000 of 2 percent term bonds to renovate a historic wing of its main administrative building. The bonds mature in five years on July 1, 2027. Interest is payable semiannually on January 1 and July 1. As Illustrated in the table below, a sinking fund is to be established with equal semiannual additions made on June 30 and December 31. Cash for the sinking fund additions and the semiannual Interest payments will be transferred from the General Fund shortly before the due dates. Investment earnings are added to the Investment principal. eBook Fiscal Year Period Required Addition Expected Earnings Ending Balance 2023 1 $191,164 $ $ 191,164 Print 2 191,164 1,912 384,240 2024 3 191,164 3,842 579,246 4 191,164 5,793 776,203 2025 5 191,164 7,762 975,129 References 6 191,164 9,751 1,176,044 2026 7 191,164 11,761 1,378,969 8 191,164 13,790 1,583,923 2027 9 191,164 15,840 10 191,164 17,909 1,790,927 2,000,000 Required a-1. Prepare journal entries in the debt service fund for the following: (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round Intermediate calculations.) Transaction Fund General Journal Debit Credit a. On July 1, 2022, record the budget for the fiscal year ended June 30, 2023. Include all interfund transfers to be received from the General Fund during the year. An appropriation should be provided only for the interest payment due on January 1, 2023. a Term Bond Debt Service Fund Record the budget for the fiscal year ended June 30, 2023. b. On December 28, 2022, the General Fund transferred $211,164 to the debt service fund for an interest payment and sinking fund addition. The required addition to the sinking fund was immediately invested in 2 percent certificates of deposit. b1 Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund. b2 Record the investment in the certificates of deposit. c. On December 28, 2022, the city issued checks to bondholders for the interest payment due on January 1, 2023. Term Bond Debt Service Fund Record the interest payment on the bond. d. On June 27, 2023, the General Fund transferred $211,164 to the debt service fund. The addition for the sinking fund was invested immediately in 2 percent certificates of deposit. d1 d2 Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund. Record the investment in the certificates of deposit. e. Actual interest earned on sinking fund investments at year-end (June 30, 2023) was the same as the amount budgeted in the table. This interest adds to the sinking fund balance. e Term Bond Debt Service Fund Record the actual interest earned on sinking fund investments. a-2. Prepare the closing entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field. Do not round intermediate calculations.) Transaction Fund General Journal f. All appropriate closing entries were made at June 30, 2023, for the debt service fund. Term Bond Debt Service Fund f1 Record the entry to close the budgetary statement account. f2 Record the entry to close the operating statement account. Debit Credit