The fund-basis financial statements of the City of Cottonwood have been completed for the year 2020 and appear in the first tab of the Excel spreadsheet provided with this exercise. In addition, the government-wide Statement of Net Position from the previous fiscal year is provided and should be used to determine beginning balances for accounts not appearing in the fund-basis statements. The following information is also available:

1. Capital Assets
   • Capital assets purchased by governmental funds are charged to capital expenditure and do not appear as assets in the fund-basis balance sheet. However, the balance is reflected in the Statement of Net Position in the government-wide financial statements.
   • Depreciation on capital assets used in governmental-type activities amounted to $3,070,000 for the year.
   • No capital assets were sold or disposed of and all purchases are properly reflected in the fund-basis statements as capital expenditures.
2. Long-Term Debt
   • Proceeds from bonds issued by governmental funds are reflected in other financing sources and do not appear as liabilities in the fund-basis balance sheet. Payments of principal are recognized as expenditures when due. The balance of outstanding bonds balance is reflected in the Statement of Net Position in the government-wide financial statements.
   • Interest is recognized in the fund-basis statements only when payment is due. Interest accrued but not yet payable amounted to $167,000 at December 31, 2020. Interest accrued for purposes of the government-wide statements in 2019 has been paid and is reflected in interest expenditure in 2020.
   • There are no bond discounts or premiums.
3. Deferred Inflows of Resources
   • Deferred inflows are comprised solely of property taxes expected to be collected more than 60 days after year-end. The balance of deferred taxes at the end of 2019 was $192,000 and was recognized as revenue in the fund-basis statements in 2020.
4. The City accounts for its solid waste landfill in the General Fund (public works department). The estimated liability for closure and postclosure care costs as of December 31, 2020, is $2,750,000 and appears only in the government-wide statements.
5. Transfers
   • During the year, the General Fund transferred cash to the courthouse renovation, debt service, and enterprise funds.
6. The City does not operate any internal service funds.
7. When entering amounts in the Statement of Activities, Charges for Services Revenue in the governmental funds is attributable to the following functions:

General Government	$1,156,497
Judicial Administration	44,018
Public Safety	275,492
Parks and Recreation	604,359
Community Development	51,611
Total	$2,131,977

Required:

Use the Excel template provided to complete the following requirements; a separate tab is provided in Excel for each of these steps:

1. Prepare the journal entries necessary to convert the governmental fund financial statements to the accrual basis of accounting.