Required information (The following information applies to the questions displayed below.) On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued at par $2,100,000 of 8 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 8 percent per annum, compounded semiannually. Investment earnings are added to the investment principal. Required 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.) Transaction Fund General Journal Debit Credit 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 Term Bond Debt Service Fund Estimated Other Financing Sources Estimated Revenues Appropriations 84,000 Budgetary Fund Balance Required information (The following information applies to the questions displayed below.) On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued at par $2,100,000 of 8 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 8 percent per annum, compounded semiannually. Investment earnings are added to the investment principal. Required 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.) Transaction Fund General Journal Debit Credit 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 Term Bond Debt Service Fund Estimated Other Financing Sources Estimated Revenues Appropriations 84,000 Budgetary Fund Balance
