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The followng rransuctions relste to the City of Middieton, which has a fncal year end of December 31 . The city adopts budgets for the
The followng rransuctions relste to the City of Middieton, which has a fncal year end of December 31 . The city adopts budgets for the General Fund and the debs seivice fund. NOTE for simplicity, and contrary to GASB standards, assume straightine amorfization foe the problem. 1. The City of Middicton sells a 32000,000,32,16-year qeneral obligation bond issue on January 2 at ac. The bond pays interest semionnually on July 1 and Jamuary 2, with the first principal payment scheduled for next year on January. 2 . A city had annex muust. be consuructed with the bond proceeds. 2. Budigets are adjusted to account for the sale of the bond, The debt service fund budget should be adjusted to accommodate the new debt issue. If the debt service fund does not halve sufficient resources to pay expenditures, then needed funds wall be prosided by the General fund. 3. On Febnary 1, 51000000 of the cash from the sale of the bonds is invested for one yeat at a rate of 12625 . Earnings on the investment are ayailabie for construction of the city hall annex 4. July I the first interest payment is die 5. December-3t ackisting entries are prepared Required: For the five related transactions provided; prepare al necessary journal enties for the affected funds and at the governmental acthtief ievel. Cleaily indicate the fund joutnal or the govesament wide journal in which the entiy is being recorded (if no entry is required for a trensectionievent, select "No Jourmal Entry Required in the first occount field.)
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