[Para. 6-d-1]

On January 2, 2021

,

the Street Improvement Bond Debt Service

Fund budget for 2021 is 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, 2025 for the 2.5% deferred serial bonds. The

budget should include estimated investment earnings of $3,000 during 2021.

Property tax revenues are intended to help pay $50,000 interest due during 2021

on the 2.5% deferred serial bonds (due January 1 and July 1), as well as the

$82,500 interest payment that will be due on the 2.75% serial bonds on July 1,

2018. The property tax levy will also provide resources to help pay interest of

$107,500 due on January 1, 2022 ($25,000 interest on the 2.5% deferred serial

bonds and $82,500 on the 2.75% serial bonds). No premium or accrued interest on

bonds sold is included in the 2021 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 2021 in the general journals for the Street

Improvement Bond Debt Service Fund.

[As a reminder, you should make

journal entries for FY 2021 only in the debt service fund, ignoring any

entries for governmental activities at the government-wide level or any other

funds.]