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.;Chapter 9;Bilberry County voted to establish an internal service fund to account for printing and copying for all its departments and agencies. The county engaged in the following activities related to the new fund. REQUIRED: Prepare journal entries to record these events in the internal service fund. If no entry is required, write ?No entry required.?;a) The county commission voted to transfer $300,000 from the general fund to the internal service fund to establish the new fund.;b) Entered into a capital lease for equipment to be used in printing activities. The total present value of the lease obligation is $600,000.;c) Issued $2 million in general obligation bonds at 101. The bonds were issued to acquire additional equipment and are to be serviced from the internal service fund.;d) Purchased equipment for $1,950,000. The equipment has an estimated useful life of nine years and an estimated salvage value of $150,000.;e) Billed the general fund for copying and printing charges, $70,000.;f) Paid salaries to printing employees, $50,000.
Paper#20896 | Written in 18-Jul-2015Price : $32