Question

A city sells $15 million of general obligation bonds on October 1, 2019. The bonds mature at the rate of $1 million a year each September 30, starting September 30, 2020. The amount due September 30, 2020 is paid. Also, the current year's annual interest on the bonds of $450,000 was paid on September 30, 2020. How much should the city report as expenditures in the Debt Service Fund in its year-end fund level financial statements on December 31, 2020

Answer 1

• How much should the city report as expenditures in the Debt Service Fund in its year-end fund level financial statements on December 31, 2020

$1,450,000

Step-by-step explanation:

The city must report the total 1 million debt service payment due on September 30, 2020, plus the total interest paid for the current year of 2020, which is $450,000.

Total debt service at the end of year 2020 it's $1,450,000