2. [Para. 5-a-2] On February 1, 2023, 2.5% deferred serial bonds with a face value of $3,000,000 were sold for a total amount of $3,036,250, of which $6,250 was for accrued interest from the January 1, 2023 date of the bonds and $30,000 was a premium on the bonds sold. Cash in the amount of the accrued interest and premium was deposited directly in the Street Improvement Bond Debt Service Fund. Cash in the amount of $3,000,000 was deposited and recorded in the Street Improvement Fund. Required: Record these transactions in the Street Improvement Fund and governmental activities journals. In addition to recording the liability for bonds payable in the governmental activities journal, you should record the premium on the bonds payable (credit Premium on Deferred Serial Bonds) and accrued interest on bonds sold (we recommend that you credit Expenses Interest on Long-term Debt)in the governmental activities general journal for the $6,250 of
2. [Para. 5-a-2] On February 1, 2023, 2.5% deferred serial bonds with a face value of $3,000,000 were sold for a total amount of $3,036,250, of which $6,250 was for accrued interest from the January 1, 2023 date of the bonds and $30,000 was a premium on the bonds sold. Cash in the amount of the accrued interest and premium was deposited directly in the Street Improvement Bond Debt Service Fund. Cash in the amount of $3,000,000 was deposited and recorded in the Street Improvement Fund. Required: Record these transactions in the Street Improvement Fund and governmental activities journals. In addition to recording the liability for bonds payable in the governmental activities journal, you should record the premium on the bonds payable (credit Premium on Deferred Serial Bonds) and accrued interest on bonds sold (we recommend that you credit Expenses Interest on Long-term Debt)in the governmental activities general journal for the $6,250 of
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer question 2 [Para. 5-a-2]. The second image is apart of the question.
![2. [Para. 5-a-2] On February 1, 2023, 2.5% deferred serial bonds with a face value
of $3,000,000 were sold for a total amount of $3,036,250, of which $6,250 was
for accrued interest from the January 1, 2023 date of the bonds and $30,000 was a
premium on the bonds sold. Cash in the amount of the accrued interest and
premium was deposited directly in the Street Improvement Bond Debt Service
Fund. Cash in the amount of $3,000,000 was deposited and recorded in the Street
Improvement Fund.
Required: Record these transactions in the Street Improvement Fund and
governmental activities journals. In addition to recording the liability for bonds
payable in the governmental activities journal, you should record the premium on
the bonds payable (credit Premium on Deferred Serial Bonds) and accrued
interest on bonds sold (we recommend that you credit Expenses Interest on
Long-term Debt)in the governmental activities general journal for the $6,250 of](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd046fed3-afa8-4b62-b61b-e027e2dbdbcb%2F7039ca0f-8ed0-47b8-9c0e-ceb80909c442%2F28d61uf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. [Para. 5-a-2] On February 1, 2023, 2.5% deferred serial bonds with a face value
of $3,000,000 were sold for a total amount of $3,036,250, of which $6,250 was
for accrued interest from the January 1, 2023 date of the bonds and $30,000 was a
premium on the bonds sold. Cash in the amount of the accrued interest and
premium was deposited directly in the Street Improvement Bond Debt Service
Fund. Cash in the amount of $3,000,000 was deposited and recorded in the Street
Improvement Fund.
Required: Record these transactions in the Street Improvement Fund and
governmental activities journals. In addition to recording the liability for bonds
payable in the governmental activities journal, you should record the premium on
the bonds payable (credit Premium on Deferred Serial Bonds) and accrued
interest on bonds sold (we recommend that you credit Expenses Interest on
Long-term Debt)in the governmental activities general journal for the $6,250 of
Transcribed Image Text:accrued interest.) For now you should not make the entries in the Street
Improvement Bond Debt Service Fund to record the accrued interest and
premium. Those entries will be made in Chapter 6 of this cumulative problem.
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