Fort Steven School District was authorized to issue bonds of $7,500,000 for providing additional school equipment. The authorization provided for issuance of long-term bonds maturing in ten years with interest at 6 percent payable semiannually. The school district was authorized the use of debt service fund accounting to accumulate resources to retire the bonds at maturity from taxes collected by the general fund. At the end of the year, $960,000 had been provided for retirement of debt in the debt service fund.

Instructions:

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Prepare the necessary journal entry to record the sale of the bonds. Record the amount provided in the debt service fund as a result of contributions from the general fund and earnings on investments totaling $960,000.