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 are the proceeds of a special debt service tax levy. The taxes are paid 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

Debt service payments for the fiscal year ended September 30, 20X9 amounted to $25,000, which is the total amount of principal and interest payments. As the sole financial resource for these payments is the special debt service tax levy, we need to consider the amount of taxes collected for the fiscal year. Since $24,000 of taxes had been collected, this amount should cover most of the debt service payments. Therefore, the expenditures reported in the Debt Service Fund should be equal to the debt service payments, which are $25,000. So, the correct answer is option D.

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