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 $2,250,000 in transfers from the general fund, $36,000 in income on investments, and appropriations for the two semiannual interest payments. 2. The general fund transferred $2,250,000 to the debt service fund on August 15. The debt service fund invested the cash. 3. The debt service fund liquidated investments carried at $540,000 for $567,000 and made the December 31 interest payment. 4. The debt service fund liquidated investments carried at $486,000 for $468,000 and made the June 30 interest payment. 5. Dividend and interest income for the year, received in cash, was $81,000. 6. At June 30, 2020, the debt service fund's investments had a fair value of $1,188,000.

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.

Debit Service Fund Journal
Ref.	Description	Debit	Credit
1.	Estimated other financing sources	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized lossAppropriations	Answer	Answer
	Appropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
2.	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	To record transfer from General Fund.
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	To record investment of transfer.
3.	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	Investments	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	To record liquidation of investment.
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	To record interest payment.
4.	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	Realized loss on investments	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	To record liquidation of investment.
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	To record interest payment.
5.	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
6.	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
Closing entries:
	Transfers in	Answer	Answer
	Investment income	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized loss on investmentsAppropriations	Answer	Answer
	Realized loss on investments	Answer	Answer
	Unrealized losses on investments	Answer	Answer
	Estimated other financing sources	Answer	Answer
	Estimated earnings	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized lossAppropriations	Answer	Answer
	To close actual against budgeted revenues & other financing sources.
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized lossAppropriations	Answer	Answer
	AnswerEstimated earningsFund balance-committedCashTransfers inInvestmentsRealized gain on investmentsExpenditure: interestInvestment incomeUnrealized lossAppropriations	Answer	Answer
	To close actual expenditures against appropriations.

b. Prepare the debt service fund's statement of revenues, expenditures, and changes in fund balances and the year-end balance sheet for fiscal 2020.

Use negative signs for answers to indicate "losses," "expenditures," and "excess of revenues under expenditures" - if applicable.

City of Yuma, AZ Debt Service Fund Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2020
Revenues
Investment income	Answer
Realized gains (losses)	Answer
Unrealized gains (losses)	Answer
Net investment income	Answer
Expenditures
Debt service: interest	Answer
Excess of revenues over (under) expenditures	Answer
Other financing sources (uses)
Transfer in	Answer
Change in fund balance	Answer
Fund balance-beginning	Answer
Fund balance-ending	Answer

City of Yuma, AZ Debt Service Fund Balance Sheet June 30, 2020
Assets		Fund balance
Cash	Answer	Fund balance-committed	Answer
Investments	Answer
Total assets	Answer	Total fund balance	Answer

Please answer all parts of the question.