5-7 Village of Harris

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5-7 
The Village of Harris issued $5,000,000 in 6 percent general obligation, tax-supported bonds on July 1, 2008, at 101. A fiscal agent is not used. Resources for principal and interest payments are to come from the General Fund. Interest payment dates are December 31 and June 30. The first of 20 annual principal payments is to be made June 30, 2009. Harris has a calendar fiscal year. 
1. A capital projects fund transferred the premium ($50,000) to the debt service fund. 
2. On December 31, 2008, funds in the amount of $150,000 were received from the General Fund and the first interest payment was made. 
3. The books were closed for 2008. 
4. On June 30, 2009, funds in the amount of $350,000 were received from the General Fund, and the second interest payment was made along with the first principal payment ($250,000). 
5. On December 31, 2009, funds in the amount of $142,500 were received from the General Fund and the first interest payment was made. 
6. The books were closed for 2009. 
a. Prepare journal entries to record the events above in the debt service fund. 
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund for the year ended December 31, 2008.

5-10 City of Genoa

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5–10. On July 1, 2008, a five-year agreement is signed between the City of Genoa and the Computer Leasing Corporation for the use of computer equipment not associated with proprietary funds activity. The cost of the lease, excluding executory costs, is $15,000 per year. The first payment is to be made by a capital projects fund at the inception of the lease. Subsequent payments, beginning July 1, 2009, are to be made by a debt service fund. The present value of the lease payments, including the first payment, is $68,189. The interest rate implicit in the lease is 5 percent. a. Assuming the agreement meets the criteria for a capital lease under the provisions of SFAS No. 13, make the entries required in (1) the capital projects fund and (2) the debt service fund on July 1, 2008, and July 1, 2009.