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What is the debt service fund under GASB?

The Debt Service fund is set up to account for payment of principal and interest on both short-term and long-term debt for governmental entities.

The debt service fund will account for and report financial resources that are deemed restricted, committed, or assigned to expenditures for principal as well as interest associated with long-term debt.

However, it is critical to note that this will exclude all debt issued to or from any enterprise, internal service, or trust funds. The debt service fund will apply the modified accrual basis of accounting except for interest and principal that is not considered current (until the period in which they must be paid).

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