The City of Bloomington establishes a Debt Service Fund to accumulate resources to service its...
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Accounting
The City of Bloomington establishes a Debt Service Fund to accumulate resources to service its 2021 general obligation bonds. Voters approve an additional property tax that can only be used to pay the debt service on the bonds. The city finances the remainder of the debt service through a transfer of general fund resources. Prepare journal entries to record the following transactions for the citys Debt Service Fund during calendar year 2022. No budgetary entries should be recorded. 1. For 2022, the property tax levy for debt service is $1,150,000 with $4,600 expected to be uncollectible. 2. Property taxes of $1,092,500 are collected prior to the first interest payment being due on the bonds. 3. Finance director, Yulianti Abbas, invests $862,500 in a short-term investment. 4. The investment matures with interest earnings of $4,600. 5. The city transfers $57,500 from the General Fund to the Debt Service Fund. 6. The city makes its first interest payment on the bonds in the amount of $1,150,000. 7. The city pays the bill of $4,600 from its fiscal agent for servicing the debt.
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