On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued
ID: 2526249 • Letter: O
Question
On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued at par $7,500,000 of 4 percent term bonds to construct a new city office building. The bonds mature in five years on July 1, 2021. Interest is payable semiannually on January 1 and July 1. A sinking fund is to be established with equal semiannual additions made on June 30 and December 31, with the first addition to be made on December 31, 2016. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 4 percent per annum, compounded semiannually. Investment earnings are added to the investment principal.
Just Need the Journal ENTIRES, THE ACCOUNTS ARE CORRECT. JUST NEED THE AMOUNTS.
On July 1, 2016, the first day of its 2017 fiscal year, the City of Nevin issued at par $7,500,000 of 4 percent term bonds to construct a new city office building. The bonds mature in five years on July 1, 2021. Interest is payable semiannually on January 1 and July 1. A sinking fund is to be established with equal semiannual additions made on June 30 and December 31, with the first addition to be made on December 31, 2016. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 4 percent per annum, compounded semiannually. Investment earnings are added to the investment principal.
Requirea a. Prepare a schedule in good form showing the required additions to the sinking fund, the expected semiannual earnings, and the end-of-period balance in the sinking fund for each of the 10 semiannual periods. (Note: The future amount of an ordinary annuity of $1 for 10 periods at 2 percent per period is 10.949721.) (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Fiscal Year Period Required Addition Expected Earnings Ending Balance 684,949? $ 684,949 684,949 684,949 684,949 684,949 684,949 684,949 684,949 684,949 684,949 1,383,598 2,096,219 2,823,092 3,564,503 4,320,742 5,092,106 5,878,897 6,681,424 7,500,001 2017 13,700 27,672 41,924 56,462 71,290 86,415 101,842 117,578 133,628 2 3 4 2018 2019 6 2020 7 2021 10Explanation / Answer
JOURNAL:
Capital Project Funds DATE ACCOUNT TITLES DEBIT CREDIT 1. Record a budget for the fiscal year ended June 30, 2017. Include an accrual for all interfund transfers to be received from the General Fund during the year. An appropriation should be provided only for the interest payment due on January 1, 2017. 1. ESTIMATED OTHER FINANCING SOURCES 1,669,898 ESTIMATED REVENUES 13,699 APPROPRIATIONS 150,000 BUDGETARY FUND BALANCE 1,533,597 2. On December 28, 2016, the General Fund transferred $834,949 to the debt service fund. The addition to the sinking fund was immediately invested in 4 percent certificates of deposit. Record the transfer from the general fund to the debt service fund. 28/12/2016 CASH $864,949 OTHER FINANCING SOURCES-INTERFUND TRANSFERS IN $864,949 Record the investment in the certificates of deposit. 28/12/16 INVESTMENTS 684,949 CASH 684,949 3. On December 28, 2016, the city issued checks to bondholders for the interest payment due on January 1, 2017. 28/12/16 EXPENDITURE-BOND INTEREST 150,000 CASH 150,000Related Questions
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