The City of Amarillo is authorized to issue $9,000,000, 5 percent 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 countys fiscal year-end is December 31.

Prepare the budgetary entries for 2023 assuming that the bonds were scheduled to be issued on January 2. Assume that the January 1, 2024, principal and interest payments will be included in the 2023 budget. Prepare the entry required to reflect the transfer of funds from the General Fund to the debt service fund. (You may ignore the entry in the General Fund.)

Answer is complete but not entirely correct. Transaction Fund General Journal Debit Credit 1. Record the budget transaction. 1 Debt Service Fund 225,000 Estimated Other Financing SourcesTransfers In Appropriations 225.000 2. Record the transfer of funds. 2 Debt Service Fund Cash 225,000 Other Financing Sources-Interfund Transfers In 225,000