Question: (Journal entries for several funds) Prepare journal entries for each of the following transactions. In addition, identify the fund in which each entry would be recorded.
1. The General Fund made its annual contribution of $1,500,000 to the fund that will pay $1,000,000 principal and $500,000 interest on outstanding general obligation debt.
2. The city paid $1,000,000 of principal and $500,000 of interest on outstanding general obligation bonds from resources previously accumulated.
3. A Debt Service Fund previously retired the total principal and the interest in full on an outstanding bond issue. Currently the fund carries a balance of $300,000. These resources can be spent by the General Fund in any way the city manager considers appropriate.
4. The Police Department paid $300,000 for equipment. This equipment was ordered 3 months prior to delivery at an estimated cost of $295,000 (assume a voucher system is used and the excess expenditure is approved and paid).
5. The fiscal agent for the city was paid its annual $10,000 fee from resources accumulated in the only Debt Service Fund used by the city.