The city repaid the $40,000 tax anticipation note plus interest of $300 ($40,000 X 0.03 X 90/360) (see transaction 2).

Required: 

Record this transaction in both the Street Improvement Fund and governmental activities general journals. The $300 of interest should be debited to Interest Expenditures in the Street Improvement Fund journal and to Expenses—General Government in the governmental activities journal.