(Journal entries with emphasis on Debt Service Fund) The ...

[cherise1989]

(Journal entries with emphasis on Debt Service Fund)
 
  The Shannon Township Debt Service Fund accumulates resources to pay its 2 million general obligation debt.
 
  The debt is payable in equal annual installments of principal over 10 years with 5 interest on the unpaid principal. Prepare journal entries to record the following transactions in the Debt Service Fund.
 
   a. The Township levies a special property tax amounting to 500,000 to pay debt service on its long-term general obligation debt. The tax must be accounted for in the Debt Service Fund.
   b. All the property taxes levied for debt service purposes are collected.
   c. The Township invests 150,000 in a six-month certificate of deposit.
   d. Debt service (interest of 100,000 and principal of 200,000) becomes due and payable.
   e. The debt service liabilities are paid.
   f. The certificate of deposit in c. matures and the Township receives a total of 153,000, which includes 3,000 of interest.

Question 2

When two digits in a debit or credit amount are reversed, a(n) ___________________ _ has occurred.
 Fill in the blank(s) with correct word

[Bsand8]

Answer to Question 1

a. Property taxes receivable 500,000
Revenues - property taxes 500,000

b. Cash 500,000
Property taxes receivable 500,000

c. Investments 150,000
Cash 150,000

d. Expenditures - bond principal 200,000
Expenditures - interest 100,000
Matured bond principal payable 200,000
Matured bond interest payable 100,000

e. Matured bond interest payable 200,000
Matured bond interest payable 100,000
Cash 300,000

f. Cash 153,000
Investments 150,000
Revenues  interest earned on investments 3,000

Answer to Question 2

transposition error