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Rainbow City is authorized to issue $10,000,000 4% regular serial bonds in 20x0 for the construction of a new police station. The bonds mature in equal annual amounts beginning on January 1, 20X1, for 10 years and pay interest on January 1 and July 1. The funds to pay the interest will be transferred from the General Fund. The city's fiscal year is December 31.
Required:
Question 1: Prepare the budgetary entries for 20X0 assuming that the bonds were scheduled to be issued on January 2. Assume that the January 1, 20X1 principal and interest payments will be included in the 20X1 budget.
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