Yarrow County engaged in the following debt-related transactions during the year. REQUIRED: Assume that the county maintains its books and records in a manner that facilitates the preparation of its government-wide financial statements. Prepare the necessary journal entries to record these transactions. Clearly indicate if debt is long-term or short-term (current). If no entry is required, write “No entry required.” a)The county issued $10 million in 6 percent, 20-year bonds for $10,234,932 to yield 5.8 percent (2.9 percent per semi-annual period) to the investor. b)The county made the first semi-annual interest payment on the bonds in (a). c)The county issued $3 million in 6 percent demand bonds for which it did not enter into a take-out agreement. d)In anticipation of finally issuing $20 million in bonds that were approved by the voters several months ago, the county borrowed $20 million from a consortium of national banks due in six months. The county also entered into a financing agreement with the consortium to convert the debt to 10-year debt if long-term bonds were not sold successfully. e)In anticipation of property tax revenues to be received several months after its fiscal year-end, the county borrowed $2 million from a local bank payable in nine months. f)The county leased a new machine for its county highway department in an arrangement that qualified as a capital lease. The present value of the minimum lease payments is $250,000, which approximates the fair value of the machine.
Yarrow County engaged in the following debt-related transactions during the year. REQUIRED: Assume that the county maintains its books and records in a manner that facilitates the preparation of its government-wide financial statements. Prepare the necessary
a)The county issued $10 million in 6 percent, 20-year bonds for $10,234,932 to yield 5.8 percent (2.9 percent per semi-annual period) to the investor.
b)The county made the first semi-annual interest payment on the bonds in (a).
c)The county issued $3 million in 6 percent demand bonds for which it did not enter into a take-out agreement.
d)In anticipation of finally issuing $20 million in bonds that were approved by the voters several months ago, the county borrowed $20 million from a consortium of national banks due in six months. The county also entered into a financing agreement with the consortium to convert the debt to 10-year debt if long-term bonds were not sold successfully.
e)In anticipation of property tax revenues to be received several months after its fiscal year-end, the county borrowed $2 million from a local bank payable in nine months.
f)The county leased a new machine for its county highway department in an arrangement that qualified as a capital lease. The present value of the minimum lease payments is $250,000, which approximates the fair value of the machine.
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On part b for the premium on bonds payable, what numbers were multipled to get $3,186.97?
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