Question

1 Approved Answer

Posted on Jul 16, 2024

undefined As of december 31, 2019, Sandy Beach had $9,500,000 in 4.5 percent serial bonds outstanding. Cash of $509,000 is the debt service fund's only

image text in transcribed undefined

As of december 31, 2019, Sandy Beach had $9,500,000 in 4.5 percent serial bonds outstanding. Cash of $509,000 is the debt service fund's only asset as of December 31, 2019, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund, and the debt service fund levies property taxes in an amount sufficient to cover principal payments. Required a-1. Prepare debt service fund and government-wide entries in general journal form to reflect, as necessary, the following information and transactions for FY 2020. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) Fund/ Governmental Transaction General Journal Debit Activties Credit 1. The operating budget for FY 2020 consists of estimated revenues of $1,020,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2020. Appropriations must be provided for interest payments and bond redemptions on January 1 and July 1. 1 Serial Bond Debt Service Fund Estimated Other Financing Sources 416,250 Estimated Revenues 1,020,000 Appropriations 1,416,250 Budgetary Fund Balance 20,000 Governmental Activities No Journal Entry Required 2. Cash was received from the General Fund and checks were written and mailed for the January 1 principal and interest payments. 2a Serial Bond Debt Service Fund Record cash received from the general fund. Cash 213,750 Other Financing SourcesInterfund Transfers In 213,750 2b Record principal and interest paid. ExpendituresInterest ExpendituresPrincipal 213,750 500,000 Cash 713,750 2c Governmental Activities Interest Payable Bonds Payable 213,750 500,000 Cash 713,750 3. Property taxes in the amount of $1,020,000 were levied (no estimate for uncollectible accounts has been made). 3 Serial Bond Debt Service Fund Taxes ReceivableCurrent 1,020,000 Revenues 1,020,000 Governmental Activities 1,020,000 Taxes Receivable-Current General RevenuesProperty Taxes 1,020,000 4. Property taxes in the amount of $1,019,000 were collected. 4 Serial Bond Debt Service Fund Cash 1,019,000 Taxes ReceivableCurrent 1,019,000 Governmental Activities Cash 1,019,000 Taxes ReceivableCurrent 1,019,000 5. Cash was received from the General Fund and checks were written and mailed for the July 1 principal and interest payments. 5a Serial Bond Debt Service Fund Record cash received from the general fund. Cash 202,500 Other Financing SourcesInterfund Transfers In 202,500 5b Record principal and interest paid. ExpendituresInterest ExpendituresPrincipal 202,500 500,000 Cash 702,500 50 Governmental Activities Expenses Interest on Long-term debt Bonds Payable 202,500 500,000 Cash 702,500 a-2. Prepare the closing entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) Fund / Governmental Transaction General Journal Debit Credit Activties 6. Adjusting entries were made and uncollected taxes receivable were reclassified as delinquent. At the fund level, entries were also made to close budgetary and operating statement accounts. (Ignore closing entries in the government activities journal.) Serial Bond Debt Service Fund Record the entry to close the budgetary statement account. Budgetary Fund Balance 20,000 Appropriations 1,416,250 Estimated Other Financing Sources 416,250 Estimated Revenues 1,020,000 6b Record the entry for classifying uncollectible accounts. Taxes ReceivableDelinquent Taxes ReceivableCurrent 1,000 1,000 60 Record the deferred inflows of resources. 1,000 Taxes ReceivableCurrent Cash 1,000 6c Record the deferred inflows of resources. Taxes ReceivableCurrent 1,000 Cash 1,000 6d Record the entry to close the operating statement account. Other Financing SourcesInterfund Transfers In 416,250 1,019,000 Revenues 416,250 Expenditures Interest ExpendituresPrincipal Fund BalanceRestricted 1,000,000 19,000 6e Governmental Activities 191,250 ExpensesInterest on Long-term debt Interest Payable 191,250 6f Record the entry for classifying uncollectible accounts. As of december 31, 2019, Sandy Beach had $9,500,000 in 4.5 percent serial bonds outstanding. Cash of $509,000 is the debt service fund's only asset as of December 31, 2019, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund, and the debt service fund levies property taxes in an amount sufficient to cover principal payments. Required a-1. Prepare debt service fund and government-wide entries in general journal form to reflect, as necessary, the following information and transactions for FY 2020. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) Fund/ Governmental Transaction General Journal Debit Activties Credit 1. The operating budget for FY 2020 consists of estimated revenues of $1,020,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2020. Appropriations must be provided for interest payments and bond redemptions on January 1 and July 1. 1 Serial Bond Debt Service Fund Estimated Other Financing Sources 416,250 Estimated Revenues 1,020,000 Appropriations 1,416,250 Budgetary Fund Balance 20,000 Governmental Activities No Journal Entry Required 2. Cash was received from the General Fund and checks were written and mailed for the January 1 principal and interest payments. 2a Serial Bond Debt Service Fund Record cash received from the general fund. Cash 213,750 Other Financing SourcesInterfund Transfers In 213,750 2b Record principal and interest paid. ExpendituresInterest ExpendituresPrincipal 213,750 500,000 Cash 713,750 2c Governmental Activities Interest Payable Bonds Payable 213,750 500,000 Cash 713,750 3. Property taxes in the amount of $1,020,000 were levied (no estimate for uncollectible accounts has been made). 3 Serial Bond Debt Service Fund Taxes ReceivableCurrent 1,020,000 Revenues 1,020,000 Governmental Activities 1,020,000 Taxes Receivable-Current General RevenuesProperty Taxes 1,020,000 4. Property taxes in the amount of $1,019,000 were collected. 4 Serial Bond Debt Service Fund Cash 1,019,000 Taxes ReceivableCurrent 1,019,000 Governmental Activities Cash 1,019,000 Taxes ReceivableCurrent 1,019,000 5. Cash was received from the General Fund and checks were written and mailed for the July 1 principal and interest payments. 5a Serial Bond Debt Service Fund Record cash received from the general fund. Cash 202,500 Other Financing SourcesInterfund Transfers In 202,500 5b Record principal and interest paid. ExpendituresInterest ExpendituresPrincipal 202,500 500,000 Cash 702,500 50 Governmental Activities Expenses Interest on Long-term debt Bonds Payable 202,500 500,000 Cash 702,500 a-2. Prepare the closing entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) Fund / Governmental Transaction General Journal Debit Credit Activties 6. Adjusting entries were made and uncollected taxes receivable were reclassified as delinquent. At the fund level, entries were also made to close budgetary and operating statement accounts. (Ignore closing entries in the government activities journal.) Serial Bond Debt Service Fund Record the entry to close the budgetary statement account. Budgetary Fund Balance 20,000 Appropriations 1,416,250 Estimated Other Financing Sources 416,250 Estimated Revenues 1,020,000 6b Record the entry for classifying uncollectible accounts. Taxes ReceivableDelinquent Taxes ReceivableCurrent 1,000 1,000 60 Record the deferred inflows of resources. 1,000 Taxes ReceivableCurrent Cash 1,000 6c Record the deferred inflows of resources. Taxes ReceivableCurrent 1,000 Cash 1,000 6d Record the entry to close the operating statement account. Other Financing SourcesInterfund Transfers In 416,250 1,019,000 Revenues 416,250 Expenditures Interest ExpendituresPrincipal Fund BalanceRestricted 1,000,000 19,000 6e Governmental Activities 191,250 ExpensesInterest on Long-term debt Interest Payable 191,250 6f Record the entry for classifying uncollectible accounts