Dale City is accumulating financial resources that are legally restricted to payments of general long-term debt principal and interest maturing in future years. At December 31, Year 1, $5,000,000 has been accumulated for principal payments and $300,000 has been accumulated for interest payments. These restricted funds should be accounted for in the: Debt service fund General fund A. $0 $5,300,000 B. $300,000 $5,000,000 C. $5,000,000 $300,000 D. $5,300,000 $0

Question

Business

Gianni Hill

14 October, 23:06

Dale City is accumulating financial resources that are legally restricted to payments of general long-term debt principal and interest maturing in future years. At December 31, Year 1, $5,000,000 has been accumulated for principal payments and $300,000 has been accumulated for interest payments. These restricted funds should be accounted for in the: Debt service fund General fund A. $0 $5,300,000 B. $300,000 $5,000,000 C. $5,000,000 $300,000 D. $5,300,000 $0

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Answers (2)

Know the Answer?

Rodolfo Atkins · Answer 1

D. $5,300,000 $0

Explanation

Debt service Fund General fund

Accumulated for principal payments $5,000,000 (Debt service Fund)

Add Accumulated for interest payments $300,000 (Debt service Fund)

Total $5,300,000

General fund

$0

$0

These restricted funds should be accounted for in the: Debt service fund General fund is $5,300,000 because the restricted funds of $5,000,000 accumulated for principal payments and $300,000 accumulated for interest payments should both be accounted for in the debt service fund.

Skeeter · Answer 2

D. $5,300,000 $0

Explanation:

Base on the scenario been described in the question, option d is correct answer. This is so because funds been restricted is $5,000,000 it then accumulate for principal payments and $300,000 and the interest that accumulated has to pay for both be accounted debt service funds as seen in the question.