The City of Amarillo is authorized to issue $8,000,000, 3% regular serial bonds in 2023 for the construction of a new exit off the interstate highway within city limits. The bonds mature in equal annual amounts beginning on January 1, 2024, for 10 years and pay interest on January 1 and July 1. The city is required to use all accrued interest and premiums to service the debt. The funds to pay the interest will be transferred from the General Fund. The county's fiscal year end is December 31.

a. Prepare budgetary entries for 2023 assuming that bonds were scheduled to be issued on January 2. Assume that the January 1, 2024, principal and interest payments will be included in the 2024 budget.

b. The bonds were sold on February 1, 2023, at 101. Prepare the journal entries needed to record the issuance of the bonds, including the entries required in the debt service fund and any entries required in the governmental activities ledge at the government wide level.

• I came up with this for a: (8,000,000 x .03 x ) = $120,000
• Serial Bond Debt Service Fund: Expenditures-Bond Interest D 120,000 Cash C 120,000
• Government Activities: Expenses on Long-term debt D 120,000 Cash C 120,000
• *I am confused about b. where they say the bonds were sold on February 1, 2023 at 101. -What is 101?
• Your help is appreciated.