Gotham City issued 500 000 of 8 regular serial bonds at

Gotham City issued $500,000 of 8% regular serial bonds at par (no accrued interest) on
January 2, 20X0, to finance a capital improvement project. Interest is payable semiannually on
January 2 and July 2, and $50,000 of the principal matures each January 2 beginning in 20X1
and ending in 20Y0. Resources for servicing the debt will be made available through a special
tax levy for this purpose and transfers as needed from a Special Revenue Fund. The required
transfers typically will be made on January 1 and July 1, respectively. The DSF is not under
formal budget control; the city’s fiscal year begins October 1.Prepare general journal entries to
record the following transactions and events in the General Ledger of the DSF.1. June 28,
20X0—The first installment of the special tax was received, $52,000.2. June 29, 20X0—A Special
Revenue Fund transfer of $38,000 was received.3. July 2, 20X0—The semiannual interest
payment on the bonds was made.4. July 3, 20X0—The remaining cash ($70,000) was
invested.5. December 30, 20X0—The investments matured, and $73,000 cash was received.6.
January 2, 20X1—The semiannual interest payment and the bond payment were made.7.
January 2, 20Y0—At the beginning of 20Y0, the DSF had accumulated $30,000 in investments
(from transfers) and $25,000 in cash (from taxes). The investments were liquidated at face
value, and the final interest and principal payment on the bonds was made.8. January 3,
20Y0—The DSF purpose having been served, the council ordered the residual assets
transferred to a Special Revenue Fund and the DSF terminated.View Solution: Gotham City
issued 500 000 of 8 regular serial bonds at
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