Question
The Governmental Activities Journal Entries required for these transactions A. On August 31 of 2016, $2,000,000 of 6% deferred serial bonds were issued at 103
The Governmental Activities Journal Entries required for these transactions
A. On August 31 of 2016, $2,000,000 of 6% deferred serial bonds were issued at 103 to raise money for a new construction project. The premium, by state law, must be set aside to help make future principal payments on the debt. There was no accrued interest on the bonds at the date of issuance. Interest on the bonds will be paid semi-annually each March 1stand September 1st. The first of five annual installments of the bonds will come due on September 1st, 2021.
B. On March 1, 2017, the General Fund transferred cash as needed to make the first interest payment on the bonds. Assume that Centerville has decided to amortize the bond premium over a 10 year period using straight line amortization. The interest is paid.
C. On June 30, 2017 (the fiscal year-end), all necessary adjusting and closing entries were made (ignore Governmental Activities closing entry).
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