2. Accounting for a Debt Service fund

Sun City has a fiscal year beginning January 1, 2012. Established a DSF for the payment of debt on bonds issued by the CPF. The series bonds with a face value of $ 600,000 were sold at 101 on January 3. The bond contract indicates an interest rate of 8% per year, payable every semester. The debt will be paid in 6 payments of $ 100,000 each December 31. The premium was transferred by CPF to DSF.

The government approved a special tax levy on property with an estimated income of $ 50,000. For the DSF. In addition, he received a transfer from the GF of $ 100,000.

to. Register the budget in the DSF

b. Record contributions receivable of $ 55,000, assuming 2% is uncollectible.

c. Register the collection of contributions

d. It is estimated that the "allowance for uncollectible" is very high and should be reduced by $ 2,000 and increase the "revenue"

and. Eliminate $ 1,000 of "property tax" that will be uncollectible

F. Register the transfer you will receive from the GF for $ 100,000

g. Received GF transfer

H. Register $ 6,000 received from the CPF for the premium on the bonds issued.

i. The DSF invests $ 100,000 in marketable securities for the purpose of earning interest

j. On June 30, pay the interest for the first semester

k. The DSF withdraws the investment and receives $ 4,000 of interest

L. On December 31, it recognizes the debt of the interest and principal due and the corresponding payment.

Prepare wage entries to book these transactions