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The interest and principal due on Phoenix City's debt

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The interest and principal due on Phoenix City's debt during the year were $10,000 and $60,000 respectively. Payments were made from the debt service fund. Show the impact of these transactions on the fundamental equation of accounting using modified accrual accounting method for Phoenix City.

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The solution discusses interest and principal due on Phoenix City's debt during the year.

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The expenditures are recognized as they are incurred. As the loan is paid during the course of the year, the principal and interest of the loan would be adjusted monthly to reflect the payments, when ...

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