The amount of bonds payable that should be included on the balance sheet for the debt service fund of the City of Russell at June 30, 2015 is
A)$0.
B)$350,000.
C)$700,000.
D)$3,150,000.

Question

Quizplus · Accepted Answer

The debt service fund is a governmental fund that is used to account for the resources that are set aside for the payment of principal and interest on general long-term debt. Therefore, only the bonds payable related to the general long-term debt should be included in the balance sheet of the debt service fund.

According to the information provided, the City of Russell issued $3,500,000 of general obligation bonds and sold $350,000 of those bonds during the fiscal year ended June 30, 2015. This means that the remaining bonds payable at June 30, 2015, should be $3,500,000 - $350,000 = $3,150,000. However, only the bonds payable related to the general long-term debt should be included in the balance sheet of the debt service fund. Therefore, the correct amount of bonds payable to be included in the balance sheet of the debt service fund is $350,000.

Hence, the correct answer is B) $350,000.

The Amount of Bonds Payable That Should Be Included on the Balance