PAnswer:
A. $1,460,000
B. Dr Cash $1,460,000
Cr Tax anticipation note Payable $1,460,000
C.General fund
Dr Tax anticipation note Payable $1,460,000
Dr Expenditure $43,800
Cr Cash $1,503,800
Government activities
Dr Tax anticipation note Payable $1,460,000
Dr General government interest expense $43,800
Cr Cash $1,503,800
Explanation:
a. Calculation for the estimated amount of tax anticipation financing that will be required for the remainder of FY 2017.
Estimated amount of Tax Anticipation Financing
Budgeted expenditures, remainder of year 2,500,000
Add Current liabilities payable 830,000
Less Estimated Resources Available:
Cash on hand, beginning of year (770,000)
Collections of budgeted revenues and delinquent property taxes (1,100,000)
Estimated Amount of Required Tax Anticipation Note Financing $1,460,000
b. Preparation of the Journal entry to Record the issuance of the tax anticipation notes
Dr Cash $1,460,000
Cr Tax anticipation note Payable $1,460,000
c. Preparation of journal entry to Record the repayment of the tax anticipation notes and interest
General fund
Dr Tax anticipation note Payable $1,460,000
Dr Expenditure $43,800
($1,460,000*6%*6/12)
Cr Cash $1,503,800
($1,460,000+$43,800)
Government activities
Dr Tax anticipation note Payable $1,460,000
Dr General government interest expense $43,800
($1,460,000*6%*6/12)
Cr Cash $1,503,800
($1,460,000+$43,800)
