On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued at par $300,000 of 4 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 4 percent per annum, compounded semiannually. Investment earnings are added to the investment principal.

Requirea b-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.) Credit General Journal 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 appropriation should be provided only for the interest payment due on January 1,2017 Fund Debit Term Bond Debt Service Fund 2. On December 28, 2016, the General Fund transferred $33,398 to the debt service fund. The addition to the sinking fund was immediately invested in 4 percent certificates of deposit. Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund. 2a 2b Record the investment in the certificates of deposit. 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 4. On June 27, 2017, the General Fund transferred $33,398 to the debt service fund. The addition for the sinking fund was invested immediately in 4 percent certificates of deposit. 4a 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. 4b 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 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.) Fund Transaction 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 6b Record the entry to close the operating statement account. Requirea b-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.) Credit General Journal 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 appropriation should be provided only for the interest payment due on January 1,2017 Fund Debit Term Bond Debt Service Fund 2. On December 28, 2016, the General Fund transferred $33,398 to the debt service fund. The addition to the sinking fund was immediately invested in 4 percent certificates of deposit. Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund. 2a 2b Record the investment in the certificates of deposit. 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 4. On June 27, 2017, the General Fund transferred $33,398 to the debt service fund. The addition for the sinking fund was invested immediately in 4 percent certificates of deposit. 4a 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. 4b 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 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.) Fund Transaction 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 6b Record the entry to close the operating statement account