E6-22 Serial Bond Debt Service Fund Journal Entries and Financial Statements [LO
ID: 2537235 • Letter: E
Question
E6-22 Serial Bond Debt Service Fund Journal Entries and Financial Statements [LO 6-1] The following information applies to the questions displayed below.] As of December 31, 2016, Sandy Beach had $9,700,000 in 4.0 percent serial bonds outstanding. Cash of $411,000 is the debt service fund's only asset as of December 31, 2016, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund, and the debt service fund levies property taxes in an amount sufficient to cover principal paymentsExplanation / Answer
Transaction
Fund
General Journal
Debit
Credit
1
Service Bond Debt Service Fund
Estimated Other Financing Sources
378,000
Estimated Revenues
1,050,000
Appropriations
1,378,000
Budgetary Fund Balance
50,000
Governmental Activities
No Journal Entry Required
2a
Serial Bond Debt Service Fund
Record Cash Received from the general fund.
Cash
194,000
Other Financing Sources-Interfund Transfers In
194,000
2b
Record principal and interest paid.
Expenditures-Interest
194,000
Expenditures-Principal
500,000
Cash
694,000
2c
Governmental Activities
Interest Payable
194,000
Bonds Payable
500,000
Cash
694,000
Transaction
Fund
General Journal
Debit
Credit
6. Adjusting entries were made and uncollected taxes receivable were reclassified as delinquent. At the fund level, entries were also made to close budgetary and operating statement accounts. (Ignore closing entries in the government activities journal.)
6a
Serial Bond Debt Service Fund
Record the entry to close the budgetary statement account.
Budgetary Fund Balance
50,000
Appropriations
1,378,000
Estimated Other Financing Sources
378,000
Estimated Revenues
1,050,000
6b
Record the entry to close the operating statement account.
Other Financing Sources-Interfund Transfers In
378,000
Revenues
1,050,000
Expenditures-Interest
378,000
Expenditures-Principal
1,000,000
Fund Balance-Assigned
50,000
6c
Record the entry for classifying uncollectible accounts
Taxes Receivable-Delinquent
356,000
Taxes Receivable-Current
356,000
6d
Governmental Activities
Expenses-Interest on Long-term debt
378,000
Interest Payable
378,000
Transaction
Fund
General Journal
Debit
Credit
- The operating budget for FY 2017 consists of estimated revenue of $1,050,000 and estimated other financial sources equal to the amount of interest to be paid in FY 2017. Appropriations must be provided for interest payments and bond redemptions on January 1 and July 1.
1
Service Bond Debt Service Fund
Estimated Other Financing Sources
378,000
Estimated Revenues
1,050,000
Appropriations
1,378,000
Budgetary Fund Balance
50,000
Governmental Activities
No Journal Entry Required
- Cash was received from the General Fund and checks were written and mailed for the January 1 principal and interest payments
2a
Serial Bond Debt Service Fund
Record Cash Received from the general fund.
Cash
194,000
Other Financing Sources-Interfund Transfers In
194,000
2b
Record principal and interest paid.
Expenditures-Interest
194,000
Expenditures-Principal
500,000
Cash
694,000
2c
Governmental Activities
Interest Payable
194,000
Bonds Payable
500,000
Cash
694,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.