On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued at par $7,900,000 of 6 percent term bonds to construct a new city office building. The bonds mature in five years on July 1, 2021. Interest is payable semiannually on January 1 and July 1. A sinking fund is to be established with equal semiannual additions made on June 30 and December 31, with the first addition to be made on December 31, 2016. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 6 percent per annum, compounded semiannually. Investment earnings are added to the investment principal.

Fund Credit Transaction 1. Record a budget for the fiscal year ended June 30, 2017. Include an accrual for all interfund transfers to be received from the General Fund during the year. An sh Debit General Journal riation should be provided only for the interest Term Bond Debt Service Fund Estimated Other Financing Sources payment due on January 1, 2017 stimated Revenues Appropriations udgetary Fund Balance 2. On December 28, 2016, the General Fund transferred $926,121 to the debt service fund. The addition to the sinking fund was immediately invested in 6 percent certificates of deposit. Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund 926,121 Cash Other Financing Sources-Interfund Transfers In 926,121 2b Record the investment in the certificates of deposit. nvestments Cash 3. On December 28, 2016, the city issued checks to bondholders for the interest payment due on January 1, 2017 Term Bond Debt Service Fund enditures-Interest Cash 4.On June 27,2017, the General Fund transferred $926,121 to the debt service fund. The addition for the sinking fund was invested immediately in 6 percent certificates of deposit. Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund. 4a Cash Other Financing Sources-Interfund Transfers In 4b Record the investment in the certificates of deposit. Investments Cash 5. Actual interest earned on sinking fund investments at year-end (June 30, 2017) was the same as the amount budgeted. This interest adds to the sinking fund balance. Term Bond Debt Service Fund Investments Revenues--Investment Earnings b-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 Debit Credit 6. All appropriate closing entries were made at June 30, 2017, for the debt service fund 6a Term Bond Debt Service Fund Record the entry to close the budgetary statement account. Appropriations udgetary Fund Balance stimated Other Financing Sources stimated Revenues 6b Record the entry to close the operating statement account. Other Financing Sources-Interfund Transfers In Revenues-Investment Earnings Expenditures-Interest Budgetary Fund Balance Fund Credit Transaction 1. Record a budget for the fiscal year ended June 30, 2017. Include an accrual for all interfund transfers to be received from the General Fund during the year. An sh Debit General Journal riation should be provided only for the interest Term Bond Debt Service Fund Estimated Other Financing Sources payment due on January 1, 2017 stimated Revenues Appropriations udgetary Fund Balance 2. On December 28, 2016, the General Fund transferred $926,121 to the debt service fund. The addition to the sinking fund was immediately invested in 6 percent certificates of deposit. Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund 926,121 Cash Other Financing Sources-Interfund Transfers In 926,121 2b Record the investment in the certificates of deposit. nvestments Cash 3. On December 28, 2016, the city issued checks to bondholders for the interest payment due on January 1, 2017 Term Bond Debt Service Fund enditures-Interest Cash 4.On June 27,2017, the General Fund transferred $926,121 to the debt service fund. The addition for the sinking fund was invested immediately in 6 percent certificates of deposit. Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund. 4a Cash Other Financing Sources-Interfund Transfers In 4b Record the investment in the certificates of deposit. Investments Cash 5. Actual interest earned on sinking fund investments at year-end (June 30, 2017) was the same as the amount budgeted. This interest adds to the sinking fund balance. Term Bond Debt Service Fund Investments Revenues--Investment Earnings b-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 Debit Credit 6. All appropriate closing entries were made at June 30, 2017, for the debt service fund 6a Term Bond Debt Service Fund Record the entry to close the budgetary statement account. Appropriations udgetary Fund Balance stimated Other Financing Sources stimated Revenues 6b Record the entry to close the operating statement account. Other Financing Sources-Interfund Transfers In Revenues-Investment Earnings Expenditures-Interest Budgetary Fund Balance