I need assistance with this problem.
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)
Property taxes $21,520 $20,000
Interest 50 —
Total revenues $21,570 $20,000
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)
Cash $ 70
Property taxes receivable 2,150
Total assets $3,220
Fund balance $3,220
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