As of the fiscal year ending September 30, 2013, Crystal Beach had $10,000,000 in 5 percent serial bonds outstanding. The serial bonds pay interest semiannually on March 1 and September 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of principal are transferred from the General Fund, and the debt service fund levies property taxes annually to cover interest payments. Any excess is reserved for future debt service payments.
Prepare debt service fund and government-wide entries in general journal form to reflect, as necessary, the following information and transactions for FY 2014.
(1) The operating budget for FY 2014 consists of estimated revenues of $500,000 and estimated other financing sources equal to the amount of principal to be paid in FY 2014. Appropriations must be provided for interest payments and bond redemptions on March 1 and September 1.
(2) Property taxes in the amount of $500,000 were levied (no estimate for uncollectible accounts has been made).
(3) Property taxes in the amount of $500,000 were collected.
(4) Cash was received from the General Fund and checks were written and mailed for the March 1 principal and interest payments.
(5) Cash was received from the General Fund and checks were written and mailed for the September1 principal and interest payments.
(6) At the fund level, entries were made to close budgetary and operating statement accounts. (Ignore closing entries in the government activities journal.)