Problem II: (AICPA adapted) The following transactions take place within the town of Plain: I. The general fund provides $250,000 to the Fire Department special revenue fund and expects that half of the funds will be returned within six months. 2. The town issues $2,000,000 of general obligation bonds with an interest rate of 8 percent, seme-annually. The funds are used to finance general operations. 3. The town issues $1,500,000 of 6 percent revenue bonds, which will be used to finance construction of a new addition for the fire station. A construction contract is signed totaling $720,000. 4. The Police Department, which is not financed by a specific revenue stream, is billed $125,000 for new equipment. The equipment is expected to last for five years. 5. The Plain town pool, which is financed through resident user fees, takes out a $350,000 note payable from a lo bank and uses the money to purchase pool equipment. The note will be repaid over 5 years at 5 percent annual interest; the equipment is expected to last for 5 years. 6. The first semiannual interest installment is paid for the bonds issued in #2. 7. The Fire Department special revenue fund returns $100,000 to the general fund. 8. The town maintains a motor pool for town officials, who are charged to use vehicles for town business. The following departments are billed: Mayor's office $4,000; Fire Chief $2500; Police Chief $1500; Pool Manager $1,000. 9. The first installment of the note payable in #5 is paid, with $70,000 toward principal, and $17,500 of interest. 10. Any applicable depreciation is recorded for the assets purchased in #4 and #5 above. Assume the straight line depreciation method is used, and one year's depreciation is recorded, if applicable. Instructions: For each transaction, prepare the necessary journal entries for all the funds or account groups involved. No explanation of the journal entries is required. Use the following headings for your workpaper