During 2017, the City of Party Beach Was Involved in the Following

question 6

Essay

During 2017, the City of Party Beach was involved in the following transactions:
1. A budget consisting of estimated revenues of $1,500,000 and appropriations for expenditures of $1,550,000 was approved by the city council.
2. Statements of property tax assessments totaling $1,100,000 were mailed to property owners. Experience indicates that 2% of assessed taxes will be uncollectible.
3. Equipment costing $85,000 was purchased, and old equipment was sold for $15,000 at the end of its estimated useful life.
4. The city manager signed a contract to purchase a machine costing $25,000.
5. The city received a statement from the state indicating that the city's portion of the state sales tax is $50,000.
6. The machine ordered in (4) above is delivered and accepted. The invoice in the amount of $26,000 was approved for payment.
Required:
Prepare the journal entries needed to account for the preceding transactions.

Understand the importance of actuarial information in determining the discount or premium of bonds.

Interpret the relationship between market interest rates, stated interest rates, and their impact on bond pricing and interest expense.

Understand the accounting treatment for the retirement of bonds before their maturity and the recognition of material gains or losses.

Comprehend the journal entry recording for bond reacquisition and its impact on financial statements.

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Definitions:

Ordinal

A type of qualitative data that represents categories with a meaningful order or ranking, but without a precise mathematical difference between them.

Mediating Variable

A variable that helps explain the relationship between the independent and dependent variables, acting as an intermediary in the cause-effect relation.

Direct Correlation

A relationship between two variables in which both either increase or decrease together.