Reference no: EM133175795

Question - Hatcher Village, which operates on the calendar year, issued a 5-year, 8%, $100,000 note to the Bank of Hatcher on January 2, 2024. The proceeds of the note were recorded in a Capital Projects Fund. Interest and one-tenth of the principal are due semiannually, on January 2 and July 2, beginning July 2, 2024. A Debt Service Fund has been established to service this debt; financing will come from General Fund transfers and a small debt service tax approved several years ago. The net assets of the fund at year end are not restricted or committed.

Transactions and Events:

1. On January 2, the DSF budget for 2024 was adopted. The General Fund contribution was estimated at $10,000; the tax levy was expected to yield $18,000. The appropriation included the January 2, 2025 debt service payment.

2. During 2024 taxes of $20,000 were levied and received.

3. The July 5, 2024 payment of principal and interest was made.

4. On July 2, 2024, the General Fund contribution of $10,000 was received.

5. On July 6, 2024, the residual balance of a discontinued Capital Projects Fund, $6,000, was transferred to the DSF.

6. At year end, the January 2, 2025 payment was accrued.

7. Closing entries were prepared at December 31, 2024.

Required -

A. Prepare the general journal entries (budgetary and actual) needed to record each of the transactions and events for 2024.

B. Prepare the Balance Sheet as of December 31, 2024, and a Statement of Revenues, Expenditures, and Changes in Fund Balance for the year then ended for the DSF.