What is accounting for debt service fund?
The Debt Service Fund is provided to account for the revenues, other financing sources, other financing uses, and the related expenditures for long-term debt. This includes accounting for bond principal, interest, and other debt related expenditures.
Where are debt service funds reported?
Debt service payments may be reported in a general or special revenue fund with the bond liability presented in the long-term liabilities adjustment column for governmental activities.
What type of account is serial bonds payable?
long-term liability
Serial bonds are reported on the balance sheet of the bond issuer as a long-term liability. Conversely, the bondholder reports these investments on its balance sheet as a current or non-current receivable in the asset section.
What are serial bonds in accounting?
A serial bond is a bond issue that is structured so that a portion of the outstanding bonds mature at regular intervals until all of the bonds have matured. Because the bonds mature gradually over a period of years, these bonds are used to finance projects that provide a consistent income stream for bond repayment.
Is a debt service fund a governmental fund?
There are five main types of government funds, which includes the general fund, the capital projects fund, the permanent fund, the special revenue fund, and the debt service fund.
What is debt service expense?
Debt Service Expense means, with respect to any person for any period, the aggregate of regularly scheduled principal payments (other than a Mandatory Prepayment) of all long-term Indebtedness made in cash by such person during such period on a Consolidated basis in accordance with GAAP.
Which of the following financial statements are required for debt service fund?
Which of the following financial statements are required for a Debt Service Fund? Statement of net position only. Statement of revenues, expenditures, and changes in fund balances only.
How do you Journalize bonds payable?
The entry to record the issuance of the bonds is:
- Debit Cash for $98.5 million.
- Debit Bond Discount for $0.5 million.
- Debit Bond Issue Costs for $1 million.
- Credit Bonds Payable for $100 million.
What is the journal entry for issuing bonds?
Example
| Account Name | Debit | Credit |
|---|---|---|
| Bond interest expense | $5,736 | |
| Discount on bonds payable | $736 | |
| Cash | $5,000 | |
| (Paid bond interest expense) |
What is serial bonds example?
A serial bond is a bond issuance where a portion of the total number of bonds are paid off each year. This results in a gradual decline in the total amount of the issuer’s debt outstanding. For example, a $1,000,000, ten-year serial bond will have $100,000 of bonds mature once a year for ten years.
Is serial bonds payable current or noncurrent?
For serial bonds (bonds paid in installments), the portion which is to be paid within one year is considered as a current liability; the rest are non-current.
What are the 5 types of government funds?
Governmental funds are classified into five fund types: general, special revenue, capital projects, debt service, and permanent funds.
What are three types of funds?
There are three major types of funds. These types are governmental, proprietary, and fiduciary.
What is debt service example?
If you have a $100,000 loan at 6% interest for 10 years, for example, debt service might be measured by 12 monthly payments of $1,110.21. In other words, your annual debt service for this loan is $13,322.52.
Is debt service an operating expense?
Examples of operating expenses include wages for employees, research and development, and costs of raw materials. Operating expenses do not include taxes, debt service, or other expenses inherent to the operation of a business but unrelated to production. See also: Operating income.
What is source of financing for debt service fund?
Property taxes are the primary funding source for repayment of annual debt service, with about 15% of the tax rate allocated directly to the Debt Service Fund. The allocation for debt service has been reduced over the past decade through controlled limitation of new debt issuance.
How do you record bonds in journal entries?
What is the journal entry for a bond?
To record this action, the company would debit Bonds Payable and credit Cash. Remember that the bond payable retirement debit entry will always be the face amount of the bonds since, when the bond matures, any discount or premium will have been completely amortized.
How do you record bonds?
Record the appropriate book entries upon issuing the bond. Record a debit to the Cash account and a credit to Bonds Payable, both for the total face value of the bonds issued. To record the sale of a $1000 bond, for example, debit Cash for $1000 and credit Bonds Payable (a long-term liability account) for $1000.
How do you record bond investments?
The company can make the investment in bonds journal entry by debiting the investment in bonds account and crediting the cash account on the date it purchases the bond. Investment in bonds account is an asset account in which its normal balance is on the debit side.