On January 2, 2018, the Street Improvement Bond Debt Service Fund budget for 201

Question

On January 2, 2018, the Street Improvement Bond Debt Service Fund budget for 2018 is legally adopted. The budget should provide for estimated property tax revenue of $640,000, of which $120,000 will be invested to accumulate resources over the next four years for the $500,000 principal that will be due for payment on January 1, 2022 for the 4% deferred serial bonds. The budget should include estimated investment earnings of $3,000 during 2018. Property tax revenues are intended to help pay $80,000 interest due during 2018 on the 4% deferred serial bonds (due January 1 and July 1), as well as the $52,500 interest payment that will be due on the 3.5% serial bonds on July 1, 2018. The property tax levy will also provide resources to help pay interest of $92,500 due on January 1, 2019 ($40,000 interest on the 4% deferred serial bonds and $52,500 on the 3.5% serial bonds). No premium or accrued interest on bonds sold is included in the 2018 estimated other financing sources or estimated revenues. If the Street Improvement Debt Service Fund does receive such items, they will be invested and used for eventual bond redemption or interest payments, a

Explanation / Answer

Street Improvement Bond Debt Service Fund Year 2017 May-06 Cash 2042000 To Street Improvement Bond(4%) 2000000 To Premium on Street Improvement Bonds 42000 Jul-01 Government Activieties Journal 40000 To Cash 40000 Year 2018 Jan-01 Cash 10000 To General Fund 10000 Jan-01 Government Activities Journal 40000 To Cash 40000 Jan-01 Property Taxes Receivable 640000 Uncollectable Taxes 20000 To Propety Taxes 660000 Mar-01 Cash 3047500 To Street Improvement Bonds(3.5%) 3000000 To Premium on Bonds 47500 Mar-01 Temporary Investments 47500 To Cash 47500 Jun-30 Cash 325000 To Property Taxes Receivable 325000 Jul-01 Cash 1187 To Earning on Investment 1187 Jul-01 Premium on Bonds 47500 Interest on Investment 1187 To Budgetary Fund Balance 48687 Jul-01 Government Activities Journal 40000 To Cash 40000 Jul-01 Government Activities Journal 52500 To Cash 52500 Dec-31 Cash 4187 To Earning on Investment 4187 Dec-31 Cash 290000 To Property Taxes Receivable 290000 Dec-31 Deliquint Property Taxes 45000 To Property Taxes Receivable 25000 To Uncollectilbe Taxes 20000 Dec-31 Interest on Property Taxes Receivable 3420 Uncollectable Interest on Property Taxes 180 To Interest on Property Taxes 3600 Dec-31 Government Activities Journal 40000 To Cash 40000 Dec-31 Government Activities Journal 52500 To Cash 52500 Government Activities General Journal Jul-01 Street Improvement Bond Debt Service Fund 12000 To Interest on Street Improvement Bonds 11415 To Amortisation of Premium 585 31-Dec Street Improvement Bond Debt Service Fund 40000 To Interest on Street Improvement Bonds 38250 To Amortisation of Premium 1750

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