[Note: Retain all required printouts in your cumulative folder until directed by your instructor to submit them, unless your instructor specifies submission of files electronically, in which case you will need to save a .pdf version of your trial balance.] c. As given later in Chapter 8 of this project, the assessed valuation of property within the City of Smithville is $314,727,270. Assuming the legal general obligation debt limit is 8 percent of assessed valuation, prepare in good form a schedule showing the legal debt limit, debt outstanding subject to the limit, and the legal debt margin of the city as of December 31, 2017, rounding the debt limit to the nearest whole dollar (see Illustration 6-3 for an example). A note at the bottom of the schedule should disclose that $40,000 of restricted fund balance in the debt service fund is restricted for payment of interest rather than principal repayment and therefore should be excluded from your schedule. In addition, the note should disclose the bonds authorized but unissued, as described in the introductory paragraph of Chapter 5 of the City of Smithville cumulative problem. This will inform the reader that additional debt issuances are pending. Fiscal year 2018 Transactions: d. On January 2, 2018, the City of Smithville approved the issuance of additional street improvement bonds in the total amount of $3,000,000. The new bonds will be serial bonds and will bear interest at the nominal annual rate of 3.5 percent. These bonds are dated January 1, 2018, and will be issued during the next few months when the citys bond underwriters believe market conditions are most favorable. The first interest payment on the new bonds will be due on July 1, 2018; interest will be payable January 1 and July 1 of each following year until maturity. Bonds in the amount of $250,000will mature on January 1, 2019, and in the same amount at each interest payment date thereafter until all bonds of the 2018 issue have been retired. To give you some additional practice on accounting for a debt service fund, record the following events and transactions that are presumed to occur in fiscal year 2018in the Street Improvement Bond Debt Service Fund only. You should ignore entries that would be required in the General Fund and in the governmental activities general journal related to these transactions for fiscal year 2018.Keep in mind that these transactions will not affect the 2017 financial statements that will be prepared in Chapter 9.Be sure to select 2018 in the [Year] menu. 1. [Para. 6-d-1] On January 2, 2018, the Street Improvement Bond Debt Service Fund budget for 2018is legally adopted. The budget should provide for estimated property tax revenue of $640,000, of which $120,000 will be invested to accumulate resources over the next four years for the $500,000 principal that will be due for payment on January 1, 2022 for the 4% deferred serial bonds. The budget should include estimated investment earnings of $3,000 during 2018. Property tax revenues are intended to help pay $80,000 interest due during 2018 on the 4% deferred serial bonds (due January 1 and July 1), as well as the $52,500 interest payment that will be due on the 3.5% serial bonds on July 1, 2018. The property tax levy will also provide resources to help pay interest of $92,500 due on January 1, 2019 ($40,000 interest on the 4% deferred serial bonds and $52,500 on the 3.5% serial bonds). No premium or accrued interest on bonds sold is included in the 2018 estimated other financing sources or estimated revenues. If the Street Improvement Debt Service Fund does receive such items, they will be invested and used for eventual bond redemption or interest payments, and the budget will be amended accordingly to reflect such items. Required: Record the budget for FY 2018 in the general journals for the Street Improvement Bond Debt Service Fund. [As a reminder, you should make journal entries for FY 2018only in the debt service fund, ignoring any entries for governmental activities at the government-wide level or any other funds.] 2. [Para. 6-d-2] Property taxes were levied in the amount of $660,000, of which $20,000 was estimated to be uncollectible. 3. [Para. 6-d-3] Bond interest due on January 1, 2018 in the amount of $40,000 was paid for the 4% deferred serial bonds. 4. [Para. 6-d-4] On March 1, 2018, the Street Improvement Debt Service Fund received $30,000 of premium from the sale of the additional $3,000,000 street improvement bonds (see first paragraph of section d.), plus $17,500 for two months of accrued interest ($47,500 in total). The $47,500 of premium and accrued interest was invested in temporary investments earning 3 percent per annum. Required: Prepare journal entries to record the receipt of $47,500 in cash and the subsequent investment. Also, prepare a journal entry to amend the FY 2018 budget to reflect the amounts of the premium and accrued interest on bonds sold, including an additional amount for estimated revenues for investment earnings in the amount of $1,187. (Note: You should credit Budgetary Fund Balance for the full $48,687, since the appropriation for the interest payment due on July 1, 2018, was recorded in Paragraph 6-d-1). 5. [Para. 6-d-5] By June 30, 2018, property taxes had been collected in the amount of $325,000; $200,000 was invested in temporary investments that earn 3 percent per annum. 6. [Para. 6-d-6] Bond interest of $40,000 due July 1, 2018 on the deferred serialbonds issued in 2017 and $52,500on the 3.5% serial bonds issued in 2018 was paid on that date. 7. [Para. 6-d-7]During the second half of 2018, property taxes were collected in the amount of $290,000. At year-end, the uncollected amount of current property taxes receivable and related estimated uncollectible amount were reclassified as delinquent. Interest and penalties of $3,600 were also levied, of which $180 was estimated as uncollectible. Required: Prepare the journal entries to record the receipt of current property taxes, to reclassify the uncollected amount as delinquent, and to accrue the related interest and penalties. 8. [Para. 6-d-8] Investment earnings received in cash during the year amounted to $4,187. 9. After verifying the accuracy of the preceding entries, post the amounts to the general ledger accounts by clicking [Post Entries]. Prepare closing entries for the Street Improvement Bond Debt Service Fund as of December 31, 2018. For each account closed, be sure and click on the check mark for[Closing Entry] and that Closing Entry appears in the [Transaction Description] box. Post the closing entries to the general ledger by clicking [Post Entries]. e. Export the post-closing trial balance (click on [File]-[Export]) for year 2018 to Excel to prepare a balance sheet for the Street Improvement Bond Debt Service Fund as of December 31, 2018. f. Export a pre-closing trial balance for year 2018 to Excel to prepare a statement of revenues, expenditures, and changes in fund balance for the Street Improvement Bond Debt Service Fund for the year ended December 31, 2018.