Problem 1 A. In anticipation of issuing a long term bond, on 12/1/20 a state issues a $200,000 60 day BAN to finance highway construction. Prepare the appropriate journal entry, if any, for the Fund Financial Statements for the following transactions; 1 (a) The issuance of the BAN on 12/1/20 assuming sufficient evidence does not exist of the state's ability to refinance the BAN on 1/30/21. (b) Assuming the state is unable to refinance the BAN, the entry on 1/30/21 to repay the principal of $200,000 2 (a) The issuance of the BAN on 12/1/20 assuming sufficient evidence exists of the state's ability to refinance the BAN on 1/30/21. (b) Assuming the state is able to refinance the BAN, the entry on 1/30/21 to issue a long term bond in place of the BAN. B. Redo part A assuming the journal entries are for the Government Wide Financial Statements. Problem 2 On 1/1/20 a city leases a machine. The term of the lease is 5 years with annual payments of $100,000 due every 12/31. The fair value of the machine on 1/1/20 is $400,000 and the present value of the lease payments is also $400,000. At the end of the lease the machine has an estimated residual value of $0. The first $100,000 lease payment on 12/31/20 is $10,000 of interest and $90,000 of principal repayment Assuming this lease qualifies as a Capital lease prepare the necessary 2020 journal entries for; 1. The city's Fund Financial Statements 2. The city's Government Wide Financial Statements