The Village constructed a lighting system in an older neighborhood, the cost of which will be assessed to the residents benefitting from the system. The Village issued a note on July 1, 2016, with par value of $88,000 and an interest rate of 6.25% to fund construction (ignore capitalization of interest), with another $12,500 to be transferred from the General Fund. The residents are billed for $93,500 on July 1; receipts are collected and used to pay the debt and related interest on June 30, 2017, when construction is complete.

REQUIRED:

Prepare journal entries to record the above (include all necessary related entries EXCEPT closing and, for simplicity, assume use of cash for payments) in both the Fund-based and Government-wide financial statements. For Fund-based, designate the Fund; for Government-wide, designate the activity. If the entry is the same, you may write same entry for the second set of financials; if there is no entry, write no entry.