Kindly assit me with the below problem A government has $10 million of 20-year general...
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Kindly assit me with the below problem
A government has $10 million of 20-year general obligation bonds outstanding. The bonds bear interest of 8% per year, payable semiannually each April 1 and September 1. In addition, principal payments of $500,000 are due on September 1. The debt service on the bonds is financed by transfers from the General Fund and investment earnings on the investment of resources being accumulated for eventual retirement of the principal. Assume December 31 is the end of the fiscal year Record the following transactions in the Debt Service Fund.
1) Received a transfer from the General Fund to provide for the April 1 interest payment, $400,000.
2) Paid the April 1 interest payment when due, $400,000.
3) Received a transfer of $560,000 the remaining assets of a terminated Capital Projects Fund.
4) Received a second transfer from the General Fund, $850,000.
5) Received interest on investments of the fund, $100,000.
6) Paid the September 1 interest payment, and principal payment of $500,000.
7) The fair value of the Debt Service Fund investments increased during the year by $45,000.
8) Accounts are closed.
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