A city keeps its books on a calendar year basis.On April 1,2013,the city sold $500,000 of 6% general obligation bonds,payable in semi-annual installments.The first installment,due October 31,2013 covered interest of $15,000 and principal of $25,000.For the year ended December 31,2013,how much should the Debt Service Fund report as expenditures?

Question

Quizplus · Accepted Answer

The Debt Service Fund should report the total amount of the first installment as expenditures, which includes both the interest of $15,000 and the principal of $25,000, totaling $40,000.

A City Keeps Its Books on a Calendar Year Basis