4.8

Residents of Green Acres, a gated community located in the City of Foothills, voted to form a local improvement district to fund the construction of a neighborhood park. The city agreed to administer the bonded debt; however, residents of Green Acres are solely responsible for repaying the bond issue. The following events are related to the special assessment park debt for the current fiscal year: 1. On January 1, the city assessed levies totaling $5,000,000 on properties within Green Acres. The levies are payable in 10 equal annual installments due at the end of the fiscal year, beginning in the current year, with 5 percent interest due on unpaid installments 2. All assessments associated with the current year's installment were collected by December 31, as was the interest due on the unpaid installments. A portion of assessments receivable equal to next year's installment of $500,000 was reclassified as current. 3. On December 31, the first principal payment of $500,000 was made to bondholders, as was interest on the debt. 4. All additions and deductions were recorded by the custodial fund. Assume that all additions and deductions can be aggregated because resources are held less than three months. b. Prepare journal entries for each of the foregoing events for the city. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Answer is not complete. No Transaction Credit General Journal Assessments Receivable-Current Assessments Receivable-Noncurrent Debit 500,000 4,500,000 Due to Special Assessment Bondholders-Principal 5,000,000 B 2(a) Cash 750,000 Assessments Receivable Current 500,000 250,000 Due to Special Assessment Bondholders---Interest 2(b) 500,000 Assessments Receivable-Current Assessments Receivable-Noncurrent 500,000 Due to Special Assessment Bondholders-Principal Due to Special Assessment Bondholders-Interest Cash 500,000 250,000 750,000 04 No Journal Entry Required