City of Only policies for DSF activity:

Premiums received by a DSF are set aside for interest payments. Amortize bond premiums and discounts whenever an interest payment is made.

All bond premiums and discounts are amortized on a straight$-$line basis.

Routine transfers may be used for either principal or interest payments.

The City has chosen not to accrue payments for general long$-$term debt due early after fiscal year end.

Debt Service Fund #$1$

This DSF was established to make all routine principal and interest payments on general obligation term bonds issued on April $1,2014.$ At issuance, the bond issue costs were $$1,000$ for issuing $$70,000$ in bonds, and the bond premium was $$10,000.$ The bonds were issued to help finance an expansion of City Hall. The bonds have a $7\%$ face rate and mature on April $1,2024.$ Interest is paid semi$-$annually on April $1$ and October $1.$

$1$ The City Council passed the budget for Fiscal Year $2021.$ The finance director estimates $$17,500$ in financing sources from other funds and expects to make expenditures of $$4,900$ for interest. Note: When recording the budget, use only the general ledger control accounts.

$2$ The October $1$ interest payment was made on the bonds outstanding at the beginning of the fiscal year.

$3$ The April $1$ interest payment was made when due.

$4$ The remaining assets were transferred to DSF #$4$ to assist in the refunding.

$5$ The budgetary accounts were closed.