The Following Events Take Place

question 9

Essay

The following events take place:
1. Interest payments in the amount of $20,000 that are the responsibility of the Debt Service Fund are paid by the General Fund.
2. The Internal Service Fund bills the Special Revenue Fund $25,000 for services performed.
3. The Special Revenue Fund transfers $10,000 to the Internal Service Fund as a temporary loan.
4. The General Fund transfers $150,000 to start an Internal Service Fund.
Required:
Identify the interfund activity as a loan, services provided and used, interfund transfer, or interfund reimbursement and prepare entries in general journal form to record the transactions on the records of the fund involved.

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Definitions:

Financial Condition

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A comparison of a single firm’s present performance with its own past performance, preferably for more than two years.

Financial Ratios

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