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 $1,250,000 in transfers from the general fund, $20,000 in income on investments, and appropriations for the two semiannual interest payments. 2. The general fund transferred $1,250,000 to the debt service fund on August 15. The debt service fund invested the cash. 3. The debt service fund liquidated investments carried at $300,000 for $315,000 and made the December 31 interest payment. 4. The debt service fund liquidated investments carried at $270,000 for $260,000 and made the June 30 interest payment. 5. Dividend and interest income for the year, received in cash, was $45,000. 6. At June 30, 2020, the debt service fund's investments had a fair value of $660,000.

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.

Drop down options include (Estimated Earnings, Fund balance - committed, Cash, Transfer in, Investments, Realized Gain on Investments, Expenditure: interest, Investment Income, Unrealized loss on investments, 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.

Ref. Debit Service Fund Journal Description Estimated other financing sources Debit Credit Appropriations To record transfer from General Fund. To record investment of transfer. Investments To record liquidation of investment. To record interest payment. Realized loss on investments To record liquidation of investment. To record interest payment. Closing entries: Transfers in Investment income Realized loss on investments Unrealized losses on investments Estimated other financing sources Estimated earnings To close actual against budgeted revenues & other financing sources. To close actual expenditures against appropriations. 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 Realized gains (losses) Unrealized gains (losses) Net investment income Expenditures Debt service: interest Excess of revenues over (under) expenditures Other financing sources (uses) Transfer in Change in fund balance Fund balance-beginning Fund balance-ending City of Yuma, AZ Debt Service Fund Balance Sheet June 30, 2020 Fund balance Fund balance-committed $ Assets Cash Investments Total assets $ Total fund balance