In the fiscal year ended September 30, 20X9, debt service payments were made in January and July from the Debt Service Fund in the total amount of $25,000 ($10,000 principal, $15,000 interest). The sole financial resource for the debt service payments is the proceeds of a special debt service tax levy. The taxes are levied and collected in increments of about $27,000 and are due in June of each year. For the fiscal year ended September 30, 20X9, assuming $24,000 of taxes had been collected for this fiscal year, the expenditures reported in the Debt Service Fund would be

Question

Quizplus · Accepted Answer

The Debt Service Fund only receives revenue from special debt service tax levies, which are collected in June of each year. Therefore, the $24,000 of taxes collected for the fiscal year ended September 30, 20X9, would not be enough to cover the debt service payments made in January and July of that year. Therefore, the expenditures reported in the Debt Service Fund for the fiscal year ended September 30, 20X9, would be the total amount of debt service payments made, which is $25,000 ($10,000 principal + $15,000 interest).

In the Fiscal Year Ended September 30, 20X9, Debt Service