22222 - 1. During the fiscal year ended 6/30/10, the City...

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1. During the fiscal year ended 6/30/10, the City of Hooksett engaged in the following transactions. REQUIRED: Assuming the city maintains its books and records in a manner that facilitates the preparation of its governmental fund financial statements, prepare all necessary journal entries that the City should make for each transaction. Clearly indicate in which fund the entry is being made. If no entry is required, write “No Entry Required.” a) In July 2009, the City issued $20 million in 6% general obligation term bonds to finance construction of a new building to house City offices. The bonds were issued at a premium of $200,000. b) In September 2009, the City transferred $1 million from the General Fund to cover the $.6 million principal and $.4 million interest payments due that month on debt issued in previous years. c) In September 2009, the City paid the principal and interest due from (b). d) In June 2010, the City transferred $2 million from the General Fund to cover the $1.2 million interest payment and the $.8 million principal payment due in July 2010 on the bonds issued in (a). 2. River Walk 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 transactions 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 $100,000 from the General Fund to the internal service fund to establish the new fund. b) The fund entered into a capital lease for equipment to be used in printing activities. The total present value of the lease obligation is $1,500,000. c) Issued $1 million in general obligation bonds at 101. The bonds were issued to acquire additional equipment. The bonds are to be serviced from the internal service fund. d) Purchased equipment at a cost of $780,000. The equipment has an estimated useful life of nine years and an estimated salvage value of $180,000. e) Billed the General Fund for copying and printing charges, $45,000. f) Paid salaries to printing employees, $25,000.
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3. The City of Meredith received a donation from the estate of the late Kathy Smith to be used to support the City Public Library. The gift consisted of $200,000 cash and a portfolio of securities with a market value of $300,000. The securities have a book value of $250,000. The donor stipulated that the principal of the gift, including investment gains (realized and unrealized) but excluding investment losses, must be kept intact. The income must be used to care for and maintain the book collection at the Smith Public Library. All appropriate costs, including investment losses, may be charged against the
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This note was uploaded on 10/20/2010 for the course ACCT 321 taught by Professor Staff during the Spring '10 term at Abilene Christian University.

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22222 - 1. During the fiscal year ended 6/30/10, the City...

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