Record the following transactions on the books of a special assessment debt fund

Question

Record the following transactions on the books of a special assessment debt fund. If no entry is needed, so indicate.

1)        On January 1, the city assessed levies totaling $20,000,000 on properties in the special assessment district. The levies are payable in five equal annual installments beginning in the current year, with 8 percent interest due on the unpaid installments.

2)        All assessments associated with the current year’s installment were collected, as was the interest due on the unpaid installments.

3)        The first principal payment was made to the bondholders as was the interest on the debt.

Explanation / Answer

Part 1

Part 2

Part 3

Accounts title and explanation debit credit Assessments Receivable-Current (20,000,000 / 5) 4,000,000 Assessments Receivable-noncurrent (balancing figure) 16,000,000 Due to special assessments bondholders-principal 20,000,000

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