Special Assessment Debt Fawn Community Located In The City Of

Special Assessment Debt. Fawn community, located in the City of Deerville, voted to form a local improvement district to fund the construction of a new community center. The city agreed to construct the community center and administer the bond debt; however. Fawn community was solely responsible for repaying the bond issue. To administer the bond debt, the city established the Local Improvement District Fund. Following are several events connected with the Local Improvement District Fund.
1. On June 30, 2010, the city assessed levies totaling $6,000,000. The levies are payable in 10 equal annual installments with 4 1/2 percent interest on unpaid installments.
2. All assessments for the current period were collected by June 30. 2011, as was the interest due on the unpaid installments.
3. On July 1, 2011, the first principal payment of $600,000 was made to bondholders as was interest on the debt.
a. What type of fund is the Local Improvement District Fund? Explain your answer.
b. Make journal entries for each of the foregoing events that affected the Local Improvement District Fund.
c. How would this fund be reported in the City of Deerville’s financial statements?

Posted in Uncategorized