PARTII SHORT PROBLEMS ANO CASES ( 60 POINTS) 1 Jefferson Parish Government Issue

Question

PARTII SHORT PROBLEMS ANO CASES ( 60 POINTS) 1 Jefferson Parish Government Issued $100 million bonds which mature in 20 years in August 2011. The Coupon yield of 3.5%) market rate. Jefferson Parish financial year ends lanuary n The proceeds of the bonds are to be used for the construction of a baseball stadium. rate of the bond is 6 percent Interest is paid semi annually on January 31 and bonds were sold for $89.3 million, a price which reflects a 7 percent (semiannual Required: a. Provide the Journal entries to record the proceeds of the Bond in General Fund Account as of August 1, 2011 Provide the journal entries to accrue the interest expense for the first six months in the General Fund. b. Provide the transfer of the Interest due January 31, 2012 to the Debt Service Fund from the General Fund. This is for the payment of the Interest. c.

Explanation / Answer

A.)

Cash A/c Dr 89.3 Million $

Loss on issue of bonds A/c Dr 10.7 Million $

To 7% Bonds A/C 100 Million $

( Being Bonds issued)

Bond Fund invesment A/c Dr 100 Million $

To General Fund A/c   100 Million $

( Being investment made)

B.)on Dec 31st

Interest Exp A/c Dr 2.917Million$

To Interst Accrue A/c 2.917Million$

( Being Interest Due)

General Fund A/c Dr 2.917 Million $

To Interest Expense A/c 2.917 Million$

( Being Transfer to General Fund A/c)

C.)

Jan 31st 2012 Interest Accrue A/c Dr 2.917 Million $

Interst Exp A/C Dr 0.583 Million $  

To Cash A/c 3.5 Million $

( Being Interest exp  Paid )

July 31st 2012

Interest Exp A/c Dr 3.5 Million $

To Cash A/c 3.5 Million $

( Being Interest exp  Paid )

  

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.