Debt Service Fund Transactions

The City of Yuma, Arizona accounts for debt service related to its $10,000,000 face value, 5% general obligation term bonds, issued July 1, 2019, in a debt service fund. The citys accounting year ends on June 30. Interest on the bonds is due each December 31 and June 30.

The following events occur in fiscal 2020:

1. The debt service fund budget called for $1,750,000 in transfers from the general fund, $28,000 in income on investments, and appropriations for the two semiannual interest payments. 2. The general fund transferred $1,750,000 to the debt service fund on August 15. The debt service fund invested the cash. 3. The debt service fund liquidated investments carried at $420,000 for $441,000 and made the December 31 interest payment. 4. The debt service fund liquidated investments carried at $378,000 for $364,000 and made the June 30 interest payment. 5. Dividend and interest income for the year, received in cash, was $63,000. 6. At June 30, 2020, the debt service fund's investments had a fair value of $924,000.

Assume that all debt service fund resources are committed.

Required

a. Prepare the journal entries to record the above events in the debt service fund. Include necessary closing entries.