Hi, Tutor. I need help on a debt service fund basic entries homework problem. The problem is written below. I would greatly appreciate the help you give me. Thanks, Brian. Prepare the journal entries required in the Debt Service Fund to account for the transactions written below for questions numbered 1 through 8. Prepare closing entries for question 9. A city establishes a debt service fund to account for a serial issue of $100M, 6% bonds sold at 102. Principal is to be paid evenly over a period of 20 years beginning at the end of year 1. Of bond proceeds, $2M is to be placed in a reserve for payment of principal and interest. Bonds are funded from general revenues and all required transfers from the general fund are to be made when interest and principal payments are due, at year-end. 1. The bond premium, $2M, is transferred from the Capital Projects fund. 2. The annual budget is recorded; interest receipts are estimated at $120,000. 3. The reserve fund of $2M is invested in U.S. Government securities. 4. Investment interest of $90,000 is received. As of year-end, the City has earned, but not yet received, an additional $30,000 of interest. It will be collectible within 30 days after the end of the year. This interest is reflected in the market price of the bonds. 5. $11M is received from the general fund ($6M for interest, $5M for principal). 6. Interest and principal become due at year-end but owing to computer problems, payments to bondholders are delayed. 7. Assume alternatively that principal and interest are not due until early in the following year. 8. Assume alternatively that principal and interest are not due until February 15th of the following year. 9. The government closed the accounts.,Hi, Tutor. Thank you for taking the time to evaluate my assignment. Please accept my assignment to begin working on it. I greatly appreciate the help you are giving me. Thanks again, Brian.
Paper#11096 | Written in 18-Jul-2015Price : $25