Prepare the budgetary entries for 2023 assuming that the bonds were scheduled to be issued on January 2. Assume that the January 1, 2024, principal and interest payments will be included in the 2023 budget. Prepare the entry required to reflect the transfer of funds from the General Fund to the debt service fund. (You may ignore the entry in the General Fund.)
Prepare the budgetary entries for 2023 assuming that the bonds were scheduled to be issued on January 2. Assume that the January 1, 2024, principal and interest payments will be included in the 2023 budget. Prepare the entry required to reflect the transfer of funds from the General Fund to the debt service fund. (You may ignore the entry in the General Fund.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
The City of Amarillo is authorized to issue $9,000,000, 5 percent regular serial bonds in 2023 for the construction of a new exit off the interstate highway within city limits. The bonds mature in equal annual amounts beginning on January 1, 2024, for 10 years and pay interest on January 1 and July 1. The city is required to use all accrued interest and premiums to service the debt. The funds to pay the interest will be transferred from the General Fund. The county’s fiscal year-end is December 31.
Prepare the budgetary entries for 2023 assuming that the bonds were scheduled to be issued on January 2. Assume that the January 1, 2024, principal and interest payments will be included in the 2023 budget. Prepare the entry required to reflect the transfer of funds from the General Fund to the debt service fund. (You may ignore the entry in the General Fund.)
Prepare the budgetary entries for 2023 assuming that the bonds were scheduled to be issued on January 2. Assume that the January 1, 2024, principal and interest payments will be included in the 2023 budget. Prepare the entry required to reflect the transfer of funds from the General Fund to the debt service fund. (You may ignore the entry in the General Fund.)
Transcribed Image Text:Transaction
Fund
1. Record the budget transaction.
1
Debt Service Fund
2. Record the transfer of funds.
2
Debt Service Fund
Answer is complete but not entirely correct.
General Journal
Estimated Other Financing Sources-Transfers In
Appropriations
Cash
Other Financing Sources-Interfund Transfers In
Debit
225,000
225,000
Credit
225,000
225,000
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