Excel city has $1,000,000 of 8%, 10 year general obligation bonds outstanding. the bonds were issued on october 1, 20x8 to finance construction of city park improvements. interest is payable semiannually on october 1 and april 1. the bonds also require an annual principal payment of $100,000 each april 1. what amount of debt service expenditures should the government report in its debt service fund for the year ended december 31, 20x9?

d.$176,000

time line issue.

after the downpayment made in april. it reduces the amount of interest expense required for oct.

both interest expenditures and principal expenditures are recognized in the debt service fund. debt service expenditures are usually not accrued at year-end but are recorded as expenditures when due and payable. in 20x9 the debt service fund paid a total of $176,000-$ $40,000 interest and $100,000 principal on april 1 (both expenditures of the fund) and $36,000 interest on october 1.

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