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A county installs utility lines to a remote part of the county, financing the project with $10,000,000 in 3.5% bonds. The bond principal will be repaid in ten equal installments over the next ten years. Affected residents will be assessed an equal amount per year over the next ten years to retire the bonds and pay interest on outstanding bonds. The county has no liability for the bonds, and records transactions related to assessment of the residents and payment of the bond principal and interest using a custodial fund.
-When the custodial fund pays assessments to the bondholders, which account is debited?

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A county installs utility lines to a remote part of the county, financing the project with $10,000,000 in 3.5% bonds. The bond principal will be repaid in ten equal installments over the next ten years. Affected residents will be assessed an equal amount per year over the next ten years to retire the bonds and pay interest on outstanding bonds. The county has no liability for the bonds, and records transactions related to assessment of the residents and payment of the bond principal and interest using a custodial fund.
-When the custodial fund pays assessments to the bondholders, which account is debited?

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