1. A government is required to use a Debt Service Fund in which of the following cases?

1. Capital leases.
2. When financial resources are being accumulated for long-term general government principal and interest maturing in future years.
3. Debt refunding.
4. All general obligation long-term debt.

2. Which of the following transactions would not be reported as expenditures in a Debt Service Fund?

1. Issuance costs incurred in a refunding bond issuance.
2. Payments to escrow agents with resources transferred from the General Fund.
3. Arbitrage rebate.
4. Repayment of BANs issued to finance a capital project.

3. Which of the following types of transactions would not potentially be reported as expenditures in a Debt Service Fund?

1. Retirement of long-term debt principal.
2. Interest on long-term debt.
3. Discounts on refunding debt.
4. Bond issuance costs.