Task: During the fiscal year ended 6/30/05, the City of Hartsville 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."
1) In July 2004, 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.
2) In September 2004, 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.
3) In September 2004, the City paid the principal and interest due from (b).
4) In June 2005, 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 2005 on the bonds issued in (a).