View the step-by-step solution to:

I need assistance with this problem. Problem 6-3 The transactions of a debt service fund can be derived from its basic financial statements .

I need assistance with this problem.


Problem 6-3

The transactions of a debt service fund can be derived from its basic financial statements.

Durwin County issued $200 million in long-term debt to fund major improvements to the county's road and transportation systems. The debt is to be serviced from the proceeds of a specially dedicated property tax. The accompanying statement of revenues, expenditures, and changes in fund balance and balance sheet were taken from its year-end financial report.

Based on the data in the two statements, prepare journal entries to summarize the transactions in which the firm engaged. You should prepare budgetary entries but need not prepare closing entries.

Durwin County, Debt Service Fund Statement of Revenues, Expenditures, and Changes in Fund Balance—Actual and Budget Year Ended December 31 (in thousands)

Actual Budget

Revenues

Property taxes $21,520 $20,000

Interest 50 —

Total revenues $21,570 $20,000

Expenditures

Principal retirement $ 6,000 $ 6,000

Interest  12,500  12,500

Total expenditures $18,500 $18,500

Excess of revenues over expenditures $ 3,070 $ 1,500

Other financing sources (uses)

Nonreciprocal transfer of bond premium from capital projects fund 150 —

Excess of revenues and net financing sources over expenditures $ 3,220 $ 1,500

Fund balance, beginning of year 0 0

Fund balance, end of year $ 3,220 $ 1,500



Durwin County, Debt Service Fund Balance Sheet as of December 31 (in thousands)


Assets

Cash $ 70

Investments 1,000

Property taxes receivable  2,150

Total assets $3,220

Fund balance $3,220

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question