The City of Evergreen issued $3,000,000 face amount of general obligation serial bonds on January 31, 2020, to finance the construction of a multi-purpose facility that can be used for conventions and various entertainment events. Interest on the bonds at 6% matures and is paid on July 31 and January 31. The first serial payment on the bonds of $200,000 is due on January 31, 2021. The debt service fund established to pay the interest and principal of the general obligation bonds paid the interest legally due on July 31, 2020.

Required:

1. Make the journal entries in the debt service fund to record A. Interest and principal payments on January 31, 2021, and B. Interest paid on July 31, 2021.

2. In addition to payments for interest and principal in a debt service fund, what other payments are usually made from a debt service fund?

3. What is the level of constraint reported for fund balance in the debt service fund?