Reference no: EM132833066

Question - Residents of Mountain Park Ranch, a gated community in the City of Ahwatukee, voted to form a local improvement district to fund the construction of a neighborhood park. The city agreed to administer the bonded debt; however, residents of Mountain Park Ranch are solely responsible for repaying the bond issue. Since the city is providing administrative services for debt for which it has no legal obligation, the GASB standards indicate the services should be accounted for using a custodial fund. The following events are related to the special assessment park debt for the current fiscal year:

On January 1, the city assessed levies totaling $6,000,000 on properties within Mountain Park Ranch. The levies are payable in 10 equal annual installments due at the end of the fiscal year, beginning in the current year, with 4 percent interest due on all unpaid installments.

All assessments associated with the current year's installment were collected by December 31, as was the interest due on the unpaid installments. A portion of the assessments receivable equal to next year's installment was reclassified as current.

On December 31, the first principal payment was made to bondholders, as well as interest on the debt.

All additions and deductions were recorded by the custodial fund. Assume that all additions and deductions can be aggregated because resources are held less than three months. Required:

Required - Prepare journal entries for each of the foregoing events by the city. and use Excel formulas for all calculated numbers.