On July 1, 2019, the first day of its 2020 fiscal year, the Town of Bear Creek issued at par $2,400,000 of 10 percent term bonds to renovate a historic wing of its main administrative building. The bonds mature in five years on July 1, 2024. 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

1. 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.)

a-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.)

Fiscal Year 2020 Period Expected Earnings $ 2021 Hemtion 2022 Required Addition $190,811 190,811 190,811 190,811 190,811 190,811 190,811 190,811 190,811 190,811 9,541 19,558 30,077 41,121 52,718 64,894 77,679 91,104 105,199 Ending Balance 190,811 391,163 601,532 822,419 1,054,351 1, 297,880 1,553,585 1,822,075 2,103,990 2,400,000 2023 2024 Transaction Fund General Journal Debit Credit a. On July 1, 2019, record the budget for the fiscal year ended June 30, 2020. 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, 2020. Term Bond Debt Service Fund b. On December 28, 2019, the General Fund transferred $310,811 to the debt service fund. The addition to the sinking fund was immediately invested in 10 percent certificates of deposit. b1 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. c. On December 28, 2019, the city issued checks to bondholders for the interest payment due on January 1, 2020. C Term Bond Debt Service Fund d. On June 27, 2020, the General Fund transferred $310,811 to the debt service fund. The addition for the sinking fund was invested immediately in 10 percent certificates of deposit. d1 Term Bond Debt Service Fund Record the transfer from the general fund to the debt service fund. d2 Record the investment in the certificates of deposit. e. Actual interest earned on sinking fund investments at year-end (June 30, 2020) was the same as the amount budgeted in the table. This interest adds to the sinking fund balance. e Term Bond Debt Service Fund Debit Credit Transaction Fund General Journal f. All appropriate closing entries were made at June 30, 2020, for the debt service fund. f1 Term Bond Debt Service Fund Record the entry to close the budgetary statement account Record the entry to close the operating statement account