On June 1, Brooktown levied special assessments in the amount of $500,000, payable in 10 equal annual installments beginning on June 30. The assessment installments are intended to pay principal and interest on special assessment bonds for which the town has pledged its full faith and credit should assessments be insufficient. Assuming no allowance for uncollectible receivables, the journal entry in the debt service fund on June 1 would include:

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DThe correct answers are B and D. For B, since the special assessments are payable in 10 equal annual installments, only the installment due within the year ($50,000) is recognized as current receivable. For D, no journal entry is made in the debt service fund on June 1 for the levy of special assessments because the initial recognition of the levy and the receivable would typically be recorded in the government-wide statements or a special assessment fund if one is used, not in the debt service fund. The debt service fund records transactions related to the payment of interest and principal on long-term debt, not the levy of assessments.

On June 1, Brooktown Levied Special Assessments in the Amount