Question

In early May 2017, an amendment to the annual budget for 2017 was approved by the city council for inflows and outflows in the Street Improvement Bond Debt Service Fund related to the bond issue. The debt service fund budget amendment provides for estimated other financing sources of $42,000 for the premium on bonds sold, estimated other financing sources of $10,000 for a transfer from the General Fund that will be used to help pay interest due on January 1, 2018, estimated revenues of $28,000 for accrued interest on bonds sold, and appropriations in the amount of the one interest payment of $40,000 to be made during 2017. (The payment that is due on July 1, 2017.)

Required: Record the budget for the Street Improvement Bond Debt Service Fund for year 2017. Budgetary entries have no effect on the government-wide accounting records.

Answer 1

Answer: See explanation

Step-by-step explanation:

The budget for the Street Improvement Bond Debt Service Fund for year 2017 will be:

Debit: Estimated other financing sources - Premium on bonds = $42000

Debit: Estimated other financing sources - Transfer in - $10000

Debit: Estimated Revenue - Accrued Interest on bonds sold = $28000

Credit: Appropriation = $40000

Credit: Budgetary funds balance = $40000