Debt Service Fund: Prepare the journal entries required in the Debt Service Fund for the following transactions.

On 2/1/14 Birmingham County sold bonds at par value in the amount of $5,000,000 to finance construction of a new library. Because of favorable interest rates, the bonds were sold at a $100,000 premium. The bonds pay 10% interest per year with interest payment dates of June 30 and December 31. The first of 10 annual principal payments of $500,000 is due on January 31, 2013.

1/2/14 The bonds were sold at a $100,000 premium. The $100,000 was received by the Debt Service Fund from the capital projects fund to be used to fund the first payment.

6/30/14 Cash sufficient to cover interest for two payments of $125,000 each and the $500,000 principal payment due on 1/31/15 less the premium is transferred from the General Fund on June 1st.

On 6/30 the first semiannual interest is paid to the bond holders by the DSF.

On 12/30 the second semiannual interest is paid to the bond holders by the DSF.

V.Fixed Asset Group:

VI. Long Term Debt Group: