William County opted to account for its duplication service center in an internal service fund. Previously the center had been accounted for in the county's general fund. During the first month in which it was accounted for as an internal service fund the center engaged in the following transactions:
1. Five copiers were transferred to the internal service fund from the government's general capital assets. At the time of transfer the copiers had a book value (net of accumulated depreciation) of $70,000.
2. The general fund made an initial cash contribution of $35,000 to the internal service fund.
3. The center borrowed $270,000 from a local bank to finance the purchase of additional equipment and renovation of its facilities. It issued a three-year note.
4. It purchased equipment for $160,000 and paid con tractors $100,000 for improvements to its facilities.
5. It billed the county clerk's office $5,000 for printing services, of which the office remitted $2,500.
6. It incurred, and paid in cash, various operating expenses of $9,000.
7. The fund recognized depreciation of $1,500 on its equipment and $900 on the improvements to its facilities.
a. Prepare journal entries in the internal service fund to record the transactions.
b. Comment on the main differences resulting from the shift from the general fund to an internal service fund in how the center's assets and liabilities would be accounted for and reported.