Exercise 6-25 (Static) Term Bond Debt Service Fund Transactions [LO 6-5] 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. Required Addition Ending Balance Fiscal Year Period Expected Earnings 2023 1 $191,164 $ 0 $ 191,164 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 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 1,790,927 10 191,164 17,909 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.