In 2014 the voters of Solis City authorized the construction of a new swimming pool for a total cost of no more that $4 million. The voters also approved the issuance of $4 million of 20-year, 5% general obligation serial bonds to be repaid by a special property tax. Interest on these bonds is payable annually on June 30. On June 30, 2014, the city sold the bonds at 101 and signed contracts for the construction of the swimming pool. Principal payments of $200,000 are due each June 30, beginning in 2015. If the property tax revenue is not sufficient to make the necessary principal and interest payments, the city is obligated to transfer the necessary monies from the general fund to the debt service fund. The city does not formally incorporate budgetary entries in the debt service fund but it does use encumbrance accounting for control purposes. The city has a June 30 fiscal year-end.

REQUIRED: Assume that the city maintains its books and records in a manner that facilitates the preparation of the fund financial statements. Prepare journal entries in the debt service fund for the following transactions.

1. The city immediately transferred the premium to the debt service fund. The debt service fund may not use the premium to pay principal or interest until the year 2029.

(b) On June 30, the city invested the premium in a 10-year 5% certificate of deposit (CD) at a local financial institution. The CD pays interest annually on June 30. Interest is automatically reinvested in the CD.

(c) Property taxes in the amount of $250,000 were collected by June 30, 2015. The city expects to collect another $50,000 by August 31.

(d) The city transferred to the debt service fund the cash necessary to make the June 30, 2015 principal and interest payments. The checks will be mailed on July 1.

(e) The city recognized interest earned on the CD.

(f) The city recognized the appropriate liabilities in the debt service fund.