ernment-wide entries in general journal form to reflect, as necessary, the following information and transaction for FY 2011. (1) The operating budget for FY 2011 consists of estimated revenues of OMR 610,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2011. Appropriations must be provided for interest payments and bond
ernment-wide entries in general journal form to reflect, as necessary, the following information and transaction for FY 2011. (1) The operating budget for FY 2011 consists of estimated revenues of OMR 610,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2011. Appropriations must be provided for interest payments and bond
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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11. As of December 31, 2010, ‘N’ Town had OMR 5,750,000 in 3 percent serial bonds outstanding. Cash of OMR 524,500 is the debt service fund’s only asset as of December 31, 2010, and there are no liabilities. The serial bonds pay interest semi-annually on January 1 and July 1, with OMR 350,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund and the debt service fund levies property taxes in an amount sufficient to cover principal payment.
Required:
Prepare debt service fund and government-wide entries in general journal form to reflect, as necessary, the following information and transaction for FY 2011.
(1) The operating budget for FY 2011 consists of estimated revenues of OMR 610,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2011. Appropriations must be provided for interest payments and bond redemptions on January 1 and July 1.
(2) Cash was received from the General Fund and checks were written and mailed for January 1 principal and interest payments.
(3) Property taxes in the amount of OMR 610,000 were levied (no estimate for uncollectible accounts has been made).
(4) Property taxes in the amount of OMR 609,500 were collected.
(5) Cash was received from the General Fund and checks were written and mailed for the July 1 principal and interest payments.
Adjusting entries were made and uncollected taxes receivable were reclassified as delinquent. At the fund level, entries were also made to close budgetary and operating statement accounts. (Ignore closing entries in the government activities journal.)
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