Chapter 8 pp2 - Debt Service Funds Chapter 8 Learning...

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Unformatted text preview: Debt Service Funds Chapter 8 Learning Objectives for DSFs Understand basic purpose and nature of DSFs and liabilities serviced by them, and when DSFs are required Understand Debt terminology Record transactions and prepare financial statements Understand accounting and reporting for special assessment DSFs Understand, record, & report refundings of GLTL and defeasances of GLTL. Debt Service Funds Purpose: To account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest on general Required: Only if 1. they are legally mandated or 2. financial resources are being accumulated for principal and interest payments maturing in future years. Debt Terminology General obligation indicates full faith and credit of the governmental unit pledged to repay the debt Revenue debt indicates specific revenue source dedicated to repay the debt Double barrel is revenue debt with repayment guaranteed by full faith and credit of governmental unit Typical Debt Service Transactions Budgetary entry Receipt of financing Investments Debt service expenditures Budgetary entry [Page 310] Estimated Revenues Property Taxes Estimated Revenues Investment Income Estimated Transfer from GF Appropriations Bond Principal Retirement Appropriations Interest on Bonds Appropriations Fiscal Agent Fees Unreserved Fund Balance 162,000 6,000 80,000 100,000 50,000 10,000 88,000 Major Sources of Revenue & OFSs * Taxes-Same JEs as GF and SRF; I&S rate *Intergovernmental Revenues- Grants Same JEs as GF and SRF *Investment Revenue-recognized when earned (accrue at EOY) *Transfers-OFS-Transfer from other fund Make investments to establish funded reserves [Page 310] Investments Unreserved Fund Balance Cash Reserve for Fiscal Exigencies 80,000 80,000 80,000 80,000 Reserve for Exigencies entity must declare state of emergency in order to use reserve. Record debt service expenditures, GLTL becomes due [Page 311]...
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Chapter 8 pp2 - Debt Service Funds Chapter 8 Learning...

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