Question

Citizens within a defined geographic area of dolan city created a special assessment district to facilitate the construction of sidewalks. the city was responsible for overseeing the entire construction project. the city issued bonds in its own name to pay the contractor for the construction. however, the city was not responsible in any manner for the bonds. the bonds were secured by the special assessments that are levied against properties within the special assessment district. In Which of the following funds of Dolan City would collections of special assessments for the construction of sidewalks be recorded?

A) General Fund
B) Capital Projects Fund
C) Debt Service Fund
D) Special Revenue Fund

Answer 1

The special assessments levied against properties within Dolan City's sidewalk construction district would be recorded in the Debt Service Fund, as it is used for the repayment of long-term debt principal and interest.

Step-by-step explanation:

The collections of special assessments for the construction of sidewalks in Dolan City, which are levied against properties within the special assessment district, would typically be recorded in the Debt Service Fund. This fund is used to account for the payment of general long-term debt principal and interest. Since the city issued bonds that are to be repaid through these special assessments, the Debt Service Fund is appropriate for tracking these transactions, as it ensures the money is used specifically for servicing the debt incurred from the construction project.