Suppose the City of St. George, Utah, decides to assist residents by installing sidewalks in their neighborhood. Construction will be financed by cash provided from a ten-year, 4 percent, serial bond issue for which the government has no liability. Bonds mature at a rate of $200,000 per year. Area residents are assessed over a ten-year period to cover bond principal and interest payments. Events are as follows:

1. Serial bonds are issued, totaling $2,000,000.
2. Assessments of $280,000 are levied on area residents to cover the first year's principal and interest payments.
3. Assessments are collected and the first year's bond principal and interest are paid.
 

 

Required

Record the above events in a custodial fund.