Reference no: EM132782524

Question - Prepare the journal entries required in an Internal Service Fund to record the following transactions.

1. Purchased a building on July 1 by paying $150,000 down and borrowing $250,000 on a 6%, 10-year mortgage. Assume annual mortgage payments are due each July 1, beginning next year.

2.  Purchased materials and supplies on account, $ 75,000.

3.  Paid employee salaries, $160,000. Accrued salaries at year end were $23,000. Accrued salaries at the beginning of the year were $ 39,000.

4.  Billed General Fund departments $ 500,000 for services provided to those departments. Billings to the Enterprise Fund totaled $ 60,000. All but 20% of these billings were collected by year end. The remaining 20% is not expected to be collected from the other funds until the second quarter of the next fiscal year.

5. Materials on hand at year end have a cost of $ 4,000. The beginning of the year inventory was $16,000.