Long-term Debt Training - oregon.gov Long-term Debt Training.pdfLong-term Debt Training Statewide Accounting and Reporting ... Bonds (Debt Service From General Fund) 29. Recording

Long-term Debt Training

Statewide Accounting and Reporting Services

June 20, 20171

2

AgendaOverview of Oregon Debt

Determining the Appropriate Fund Structure

Recording the Initial Debt Issuance

Recording Debt Service Payments

Refunding a Debt Issue

Recording Year End Transactions

Disclosure Requirements

Learning Opportunities 3

Overview of Oregon’s Debt

4

Outstanding Debt Balance Fiscal Year 2003

5 -

1,000,000,000.00

2,000,000,000.00

3,000,000,000.00

4,000,000,000.00

5,000,000,000.00

6,000,000,000.00

7,000,000,000.00

General ObligationBonds

Revenue Bonds Certificates ofParticipation

General AppropriationBonds

Total

Outstanding Debt Balance Fiscal Year 2003 and 2012

6

Types of Long-term Debt

General Obligation Bonds

Revenue Bonds

7


Authorized by the Oregon Constitution

Are direct, general obligations of the State of Oregon

The full faith, credit, and taxing power of the State of Oregon are irrevocably pledged to pay the bonds

Includes governmental, business, and fiduciary activities

8

GO Bonds Examples: Pension bond liability

Higher education facilities

Correctional facilities for adult and youth offenders

State hospital replacement

Statewide building projects

Seismic rehab of public schools and emergency buildings

Loan programs at Veterans’ Affairs, Housing, Energy, and DEQ

9

Revenue Bonds

Authorized by Oregon Statutes

Secured by pledge of revenues derived from the operation of the program funded by bond issuance

Includes both governmental and business activities

10

Revenue Bond Examples:

Lottery bonds finance education, economic development, state parks, light rail, acquisition of state forestland, watershed improvements, and economic development projects in rural and distressed communities

Highway user taxes bonds fund road building and improvement

Single family loans and multi-family housing projects

11

Lottery Revenue Bonds

Not general obligations of the state

Not secured or payable from fund other than amounts pledged

All contain a statement that says the state is not obligated to pay lottery bond principal, interest or premiums from any source other than the amounts pledged for payment and the full faith and credit or taxing powers of the State of Oregon are not pledged to the payment of lottery bonds

12

Other Types of Debt

Certificates of participation

Tax anticipation notes

Short term debt

Demand bonds

Conduit debt

13

Certificates of Participation

Authorized in ORS Chapter 283

Financing agreements normally secured by the asset being purchased or constructed

Includes both governmental purpose and business-type activities

Majority being refinanced and replaced with Q bonds

14

Historical COP Project Examples:

Computer and telecommunications systems

Capital construction

Building acquisition

Deferred maintenance

Equipment purchases

15

Anticipation NotesIssued with expectation that:

Government will receive specific resources in the near future

These resources will be used to retire the liability

Often issued as part of a cash management strategy

Generally short term in nature

16

Demand BondsAllows bondholders to redeem bonds on the basis of

terms specified in the bond agreement

Financial institution makes agreement to provide funds if the call is exercised

Can be long or short term depending on terms of agreement

Additional disclosure is required

17

Conduit DebtLimited-obligation bonds or similar debt

instruments that provide capital financing for third parties not part of the reporting entity

Issuer has no obligation for the debt

Debt repaid by third party

Not recorded in the financial statements but still must be disclosed

18

Determining the Appropriate Fund

Structure

19

Important Factors

Purpose of debt issuance

Source of funds for repayment

Legal requirements

Where cash is held

How costs are budgeted

20

Purpose of Debt

Governmental

Proprietary

Fiduciary

21

Source of Repayment

General fund appropriation

Lottery funds

Federal grants

Assessments

User charges

Program operations

Loan repayments22

Governmental Funds

Requires at least two funds

“Project” funds for expenditure of proceeds

Debt service fund to record capitalized (accrued) interest received from proceeds and payment of principal and interest

23

Governmental (continued)

Possibly a third fund for reserves (debt service fund)

Possible a fourth fund for issuance costs (fund type as budgeted)

Government-wide Reporting Fund

To record long-term liability

24

Proprietary/Fiduciary Funds

Best to set up same number of D23 funds as governmental purpose

All would be in the same GAAP fund type

Enterprise Fund

Internal Service Fund

Pension Trust Fund

25

Legal Requirements

Debt service reserve

Sinking fund

26

Where Cash is Held

Because of cash controls in SFMA:

Cash in Bank must be separated from Cash in State Treasury

Cash in State Treasury Funds (separate Treasury account numbers) must be separated

Only way to separate is with different D23 funds

27

How Costs are Budgeted

Many times costs of issuance are required to be paid out of regular operating budgets

Some costs may be paid from separate appropriation but this is less common

Advanced refundings require the establishment of administrative limitation (could be more than one) in a non-limited fund

28

New Comp Object

1500 General Obligation Bonds (Dedicated Fund)

1501 General Obligation Bonds (Debt Service From General Fund)

29

Recording the Initial Debt

Issuance30

Official Statement

$67,395,000

State of Oregon

2016 Series D


May 25, 2016

31

Official Statement

• Source of Funds:

Principal amount of 2016 bonds $82,450,000

Net original issue premium 9,659,623

Total sources $92,109,623

• Uses of Funds:

Project construction and acquisition $91,812,093

Underwriter’s discount 235,854

Cost of issuance 61,676

Total uses $92,109,623

32

Official Statement

• Description of the 2016 Series D projects we will focus on:

Oregon Department of Justice, Child Support Enforcement System (example)

Oregon Department of Revenue, Core Tax Revenue Systems Replacement (exercise)

33

Department of JusticeChild Support Enforcement System

• Source of Funds:

Principal amount of 2016 bonds $14,425,000

Net original issue premium 964,610

Total sources $15,389,610

• Uses of Funds:

Project Funds $15,340,658

Underwriter’s discount 34,369

Cost of issuance 14,583

Total uses $15,389,61034

Project Funds – Proceeds (Treasury)• T-code 190 To record face value of the bond

- DR 0065 Unreconciled Deposit 14,425,000.00

(debits to GL 0070 – cash deposit with treasurer

after reconciling to Screen 13 in R*stars)

- CR 3100 Rev Control – Cash 14,425,000.00

( c/o 1500 GO Bonds – dedicated funds)

• Fund Type – Governmental (Capital Projects)

35

Project Funds – Premium(Treasury)

• T-code 190 To record the premium received on bonds

- DR 0065 Unreconciled Deposit 964,610.05


after reconciling to Screen 13 in R*stars

- CR 3100 Rev Control – Cash 964,610.05

(c/o 1510 OIP – Bonds)

• Fund Type – Governmental (Capital Projects)36

Project Funds – Underwriter’s Discount Costs(Treasury)

• T-code 167R To record the underwriter’s discount

- DR 3500 Expend Control – Cash 34,369.42

(c/o 4050 Bond Costs)

- CR 0065 Unreconciled Deposit 34,369.42

(credits to GL 0070 – cash deposit with treasurer

after reconciling to Screen 13 in R*stars


Project Funds – Bond Issuance Costs(Treasury)

• T-code 760 To remit the cost of issuance payment to DAS



- CR 0070 Cash on deposit w/Treas 14,582.63

• T-code 761 To record the other side of payment for DAS

- DR 0070 Cash on deposit w/Treas 14,582.63

- CR 0501 A/R – Other billed 14,582.63


Accrued Interest

• Record in the fund where principal and interest payments are made.

• T-code 191 - Cash on Deposit with Treasury

• DR GL 0065 – Unreconciled Deposit

• CR GL 1225 – Accrued Interest on Bonds sold (use GL 1235 for COPs)

• Do not use GL 1230 (It is for year-end accruals)

39

Liability – Bond Payable

• T-code 504 To record face value of GO Bond liability

-DR 3200 GAAP Revenue Offset 14,425,000.00

(c/o 1500 Bond Proceeds)

- CR 1714 Bond Payable – NC 14,425,000.00

• Fund Type – Government-wide Reporting Fund

40

Liability – Premium on Bonds

• T-code 504 To record the premium on bonds sold

- DR GL 3200 GAAP Revenue Offset 964,610.05

(c/o 1510 OIP on Bonds)

- CR GL 1713 Premium on Bonds 964,610.05


41

Underwriter’s Discount or Issuance cost

• Expense at the time of issuance

• Capitalize prepaid insurance if any.

• Use T-code 514

• DR GL 0602 – Prepaid Insurance

• CR GL 3600 – GAAP Expenditure offset

• (c/o 4050 Bond costs for bonds and c/o 4055 COPs cost for COPs)

42

Variations

• Cash in State Treasury vs. Cash in bank

Uses different t-codes

• Other types of debt

Certificates of Participation

Uses different comp objects and general ledger accounts

43

Basic Accounting Entry

DR Cash 15,340,658.00

DR Bond Costs 48,952.05

CR Bond Premium 964,610.05

CR Bonds Payable 14,425,000.00

To record debt issuance.

44

Recording Debt Service Payments

45

Where to Record Payments

• Governmental activities

Principal and interest payment in governmental fund

Liability adjusted in government-wide fund

• Proprietary funds

Payments and liability adjustments are recorded in the same fund

46

Principal and Interest

• Paid through DAS

• Paid by agency

• Comp objects – Interest expense

Bonds - 7250

COPs – 7300

• Comp objects – Principal

Bonds - 7100

COPs - 715047

Principal & Interest Payment

• T-code 760 To record DOJ second payment on Series D GO Bond

- DR 3500 Exp Control – Cash 2,775,000.00

(c/o 7100 Principal)

- CR 0070 Cash w/Treasury 2,775,000.00

- DR 3500 Exp Control – Cash 203,650.00

(c/o 7250 Interest)

- CR 0070 Cash w/Treasury 203,650.00

• Fund Type – Governmental (Debt Service)

48

Principal & Interest Payment

• T-Code 761 To record the other side of debt service payment for DAS

- DR 0070 Cash w/Treasury 2,775,000.00

- CR 0501 A/R – Billed 2,775,000.00

- DR 0070 Cash w/Treasury 203,650.00

- CR 0501 A/R - Billed 203,650.00

49

Lottery Bonds

• DAS transfers lottery monies (Revenue) to agency accounts using

T-code 185R – moves money out of DAS

DR GL 3550 Operating Transfer Out

CR GL 0065 Unreconciled Cash

T-code 186-Deposit into agency

DR 0077 – Cash in Bank

CR 3150 Operating Transfer In control

• T-code 568 Agency record debt service payment

DR 3500 Expend Control – Cash

(c/o 7100 – Principal on Bonds, or c/o 7250 – Interest on Bonds)

CR 0077 Cash in Bank50

Certificate of Participation

• COPs are issued through DAS

• T-code 760 To payment on COPs

- DR 3500 Exp Control – Cash

(c/o 7150 - Principal, or 7300 - Interest)

- CR 0070 Cash w/Treasury

• T-Code 761 To record the other side of debt service payment for DAS

- DR 0070 Cash w/Treasury

- CR 0501 A/R – Billed

51

ACH Wire Payment – Outside Treasury

• T-code 167R (ACH wire transfer)

- DR 3500 Exp. Control – Cash

(c/o 7100 Principal Bonds)

- CR 0065 Unreconciled Deposit

• T-code 167R (ACH wire transfer)

- DR 3500 Exp. Control – Cash

(c/o 7250 Interest Bonds)

- CR 0065 Unreconciled Deposit52

Transfer to Treasury – Suspense Account

• T-code 714 (BT with TC 715)


(c/o 7100 – Principal Bonds)

- CR 0070 Cash on Deposit with Treasury

• T-code 714 (BT with TC 715)


(c/o 7250 – Interest Bonds)

- CR 0070 Cash on Deposit with Treasury53

Reduce Liability

• T-code 528 Reduce bond payable

- DR GL 1714 Bonds Payable NC 2,775,000.00

- CR GL 3600 GAAP Expend Offset 2,775,000.00

(c/o 7100 Principal)

• Government-wide Reporting Fund

54

Exercise 155

Exercise 1

• Debt issuance – Series D GO Bond for Department of Revenue

Proceeds and issuance cost

Establish liabilities accounts

• Debt service payment – Department of Revenue

• Reduce liability

• Assume a governmental fund for Department of Revenue & DAS

• Issuance is through DAS and Oregon State Treasury

56

Answer: Debt Issuance

• 1. TC 190 Record bond proceeds at face value


- CR c/o 1500 GO Bond Proceeds 17,025,000.00

• 2. TC 190 Record premium on GO Bonds


- CR c/o 1510 OIP – Bonds 2,029,084.55

• Governmental Fund

57


• 3. TC 167R Record underwriter’s discount costs

- DR c/o 4050 Bond Costs 42,714.61


• Governmental fund

58


• 4. T-code 760 To remit bond issuance costs to DAS

- DR c/o 4500 Bond Costs 11,369.94

- CR 0070 Cash with Treasury 11,369.94

• 5. T-code 761 To collect bond issuance costs on invoice

- DR 0070 Cash with Treasury 11,369.94

- CR 0501 A/R – Billed 11,369.94


59

Answer: Establish New Debt

• 6. T-code 504 Record bond payable at face value

- DR c/o 1500 GO Bond Proceeds 17,025,000.00

- CR 1714 Bonds Payable - NC 17,025,000.00

• 7. T-code 504 Record Premium on Bonds Sold

- DR c/o 1510 OIP – Bonds 2,029,084.55

- CR 1713 Premium on Bonds 2,029,084.55


60

Answer: Debt Payment

• 8. T-code 760 To remit principal payment to DAS

- DR c/o 7100 Principal on Bonds 2,275,000.00

- CR 0070 Cash with Treasury 2,275,000.00

• 9. T-code 761 To collect principal on invoice

- DR 0070 Cash with Treasury 2,275,000.00

- CR 0501 A/R – Billed 2,275,000.00


61

Answer: Debt Payment

• 10. T-code 760 To remit interest on bonds to DAS

- DR c/o 7250 Interest on Bonds 297,575.00

- CR 0070 Cash with Treasury 297,575.00

• 11. T-code 761 Collect interest on invoice

- DR 0070 Cash with Treasury 297,575.00

- CR 0501 A/R Billed 297,575.00


62

Answer: Reduce Liability

• 12. T-code 528 To reduce bond payable for principal payment

- DR 1714 Bonds Payable NC 2,275,000.00

- CR c/o 7100 Principal on Bonds 2,275,000.00


63

Refunding a Debt Issue

64

Types of Refunding

• Current – Debt paid off immediately

• Advanced – Proceeds held by escrow for future payments

65

COPs Refunded with Q Bonds

• What GAAP fund accounts for the refunding debt?

• GAAP Fund 2003 – General Obligation Bond

• Report the debt itself in the Government-wide Reporting Fund

• What GAAP fund accounts for the payoff of old debt?

• GAAP Fund 2002 – Certificate of Participation Bond

66

COPs Refunded with Q Bonds (continued)

• Which GAAP funds report the deferred gain or loss on refunding?

• Government-wide Reporting Fund or Proprietary fund

• Deferred gain is recorded as Deferred Inflows – Gain on Debt Refunding

• Deferred loss is recorded as Deferred Outflows – Loss on Debt Refunding

• Do not net deferred gain and loss.

• Deferred gain or loss is amortized over the remaining life of old debt or refunding debt whichever is shorter

67

What Goes Where?

Debt service fund ~ Cash transactions

Face value of refunding debt issuance

Premium or discount on issuance

Underwriter’s discount

Bond issuance costs

Remittance to Escrow for refunded debt

68

What Goes Where?

Government-wide reporting fund / Proprietary fund ~ Use full accrual method

Establish refunding debt

Capitalize premium/discount

Remove old debt and contra accounts

Record deferred gain/loss on debt refunding

69

Example: Bond Refunding

•Old debt ~ Advance refunded 2008 Series A COP, Junction City; Original face value was $3,950,000.00

•New debt ~ Refunds COP with 2016 Series F GO Bond (XI-Q) for $468,700.00

• Amount to escrow agent is $531,228.39

70

Checklist for Recording Debt

Review documents from DAS

Interagency Agreement (page 10)

Sources and Uses Statement (page 11)

Savings Summary (page 13)

Revised debt service schedules

Set up new D23 funds if required

71


Prior to recording the sale, reconcile GL accounts related to debt

Using an amortization schedule amortize related debt accounts for old debt up to settlement date

Verify the balances in amortized GL accounts

Calculate percentage of refunded debt by dividing principal amount that is refunded by balance of old debt prior to sale.

72


Prepare T-accounts to analyze transactions and ensure entries will result in accurate balances. (very helpful)

Prepare batches to record:

Cash transactions

Removal of refunded debt and related accounts from books in government-wide or proprietary funds

Record refunding debt in government-wide or proprietary funds 73

Cash Transactions

• T-code 190 To record face value of refunding debt



after reconciling to Screen 13 in R*stars)


(c/o 1505 Proceeds from Refunding

Bond/COP Debt)

• Fund Type – Governmental (Debt Service)74

Cash Transactions

• T-code 190 Record original issue premium


- CR 3100 Revenue Control - cash 64,183.97(c/o 1510 Premium on Bonds)

• T-code 167R Record underwriter’s discount

- DR 3500 Exp Control – Cash 1,310.61



• Fund Type ~ Governmental (Debt Service)

75

Cash Transactions

• T-code 760 To remit the cost of issuance payment to DAS

- DR 3500 Expend Control – Cash 344.97


- CR 0070 Cash on deposit w/Treas 344.97

• T-code 761 To record the other side of payment for DAS

- DR 0070 Cash on deposit w/Treas 344.97

- CR 0501 A/R – Other billed 344.97


76

Payment to Escrow Agent

• T-code 167R Record payment to escrow


(c/o 7050 Rfnd Pym to Escrow)



77

Eliminate Old Debt• T-code 528 to remove the COP payable in the Government-wide

reporting fund

- DR 1704 COP Payable - NC 494,000.00

- CR 3600 GAAP Exp Offset 494,000.00


• T-code 514 To remove partial premium on COP

- DR 1703 Premium on COP 17,476.14

- CR 3600 GAAP Exp Offset (c/o 7050) 17,476.14

• Fund Type – Government-wide Reporting 78

Record New Debt• T-code 504 To record the face value of the refunding debt in

the Government-wide reporting fund

- DR 3200 GAAP Rev Offset 468,700.00

(c/o 1505 Proceeds on Rfnd Bonds)

- CR 1714 Bond Payable NC 468,700.00

• T-code 504 To capitalize premium on bond


(c/o1510 Premium)

- CR 1713 OIP on Bonds Sold 64,183.97

• Fund Type – Government-wide Reporting

79

Deferred Gain/Loss CalculationFace value of refunded debt 494,000.00

Unamortized Premium on COP 17,476.14

Net Carrying Value 511,476.14 (a)

Bond Payable 468,700.00

Original Issue Premium 64,183.97

Underwriter’s Discount (1,310.61)

Costs of Issuance (344.97)

Net Proceeds to Escrow 531,228.39 (b)

Deferred Loss on Refunding (b - a) 19,752.25 80

Deferred Gain/Loss on Refunding

• T-code 514 To record loss on debt refunding

- DR 1000 Deferred Outflows-Loss on Debt

Refunding 19,752.25



• Fund Type – Government-wide reporting81

Exercise 282

Exercise 2•Record Cash Transactions

•Remove old debt

•Record refunding debt

•Record deferred gain/loss on refunding

•Assume Governmental Fund

• Issuance is through DAS and funds are held in State Treasury.

83

Answer: Cash Transactions

• 1. T-Code 190 To record refunding debt proceeds



(c/o 1505 Proceeds from Refunding)

• 2. T-Code 190 To record cash from premium



(c/o1510 Premium - Bond)

• Fund Type – Governmental Fund (Debt Service)84


• 3. T-code 167R Record underwriter’s discount

- DR 3500 Expend Control – Cash 970.29


- CR 0065 Unreconciled Deposit 970.29

• Fund Type – Governmental Fund (Debt Service)

85


• 4. T-code 760 To remit the cost of issuance payment to DAS

- DR 3500 Expend Control – Cash 254.87(c/o 4050 Bond Costs)

- CR 0070 Cash on deposit w/Treas 254.87

• 5. T-code 761 To record the other side of payment for DAS

- DR 0070 Cash on deposit w/Treas 254.87

- CR 0501 A/R – Other billed 254.87


86


• 6. T-code 167R Record payment to escrow

- DR 3500 Exp Control - Cash 396,969.92



• Fund Type – Governmental Fund (Debt Service)

87

Answer: Debt Elimination• 7. T-code 528 To remove defeased debt

- DR 1704 COP Payable 355,000.00



• 8. T-code 514 To remove premium on COP

- DR 1703 Premium on COP 41,715.08

- CR 3600 (c/o 7050) 47,715.08

• Fund Type – Government-wide Reporting Fund 88

Answer: Record New Debt• 9. T-code 504 To record bond payable


(c/o 1505 Proceeds from Rfndg)

- CR 1714 Bond Payable 347,000.00

• 10. T-code 504 To capitalize premium

- DR 3200 (c/o 1510 Premium-Bond) 51,195.08

- CR 1713 Premium on Bond 51,195.08

• Fund Type – Government-wide Reporting Fund 89

11. Answer: Deferred Gain/(Loss)Calculation of Deferred Loss/Gain on Debt Refunding 2009 Series A COP

Face Value of Refunded Debt 355,000.00

Add: Original Issue Premium 41,715.08

Net Carrying Value (a) 396,715.08

Bond Payable 347,000.00

Add: Original Issue Premium 51,195.08

Less: Underwriter’s Discount (970.29)

Less: Costs of Issuance (254.87)

Net Proceeds to Escrow Agent(b) 396,969.92

Deferred Loss on Refunding (b-a) 254.84

90

Answer: Deferred Gain/(Loss)

• 12. T-code 514 To record deferred (loss) on debt refunding

- DR 1000 Deferred Outflows - Loss on

Debt Refunding 254.84

- CR 3600 GAAP Exp Offset 254.84

(c/o 7050 Rfnd Debt Payment)


91

Recording Year End Transactions

92

Premium Amortization Calculation Original premium amount $ 82,685.80

Amortized to date (42,043.62)

Amount written off with refunding ( 17,476.14)

Remaining premium amount $ 23,166.04

Months outstanding on old debt 48

Months outstanding on new debt 48

Amortization amount=

( $23,166.04 / 48 months ) X 2 months = $965.21

93

Premium Amortization Entry

T-code 523 Record amortization of premium

DR 1713 Premium on Bonds Sold

CR 3600 GAAP Expenditure Offset

(comp obj 7450 Amort – Discount/Premium on

Bonds)

94

…or Discount

T-code 520 Amortize discount

Dr 3600 GAAP Expenditure Offset

(comp obj 7450 Amort Disc/Prem

on bonds)

Cr 1712 Discount on Bonds Sold

95

Loss Amortization Calculation

Net carrying value of old debt $511,476.14

Net proceeds to escrow agent $531,228.39

Deferred loss on refunding $ 19,752.25

Months outstanding on old debt 48

Months outstanding on new debt 48

Amortization amount=

( $19,752.25/48 months ) X 2 months = $823.01

96

Loss Amortization Entry

T-code 520 Amortize deferred outflow loss on refunding

Dr 3600 GAAP Expenditure Offset

(comp obj 7470 Amort Deferred Loss/Gain on Refunding)

Cr 1000 Deferred Outflows-Loss on Debt Refunding

97

98

Period

Ending

Princip

al

Coupo

n Interest

Debt

Service

Annual

Debt

Service

11/1/2016 5,080.40 5,080.40

5/1/2017 5,862.00 5,862.00

6/30/2017 10,942.40

11/1/2017 5,862.00 5,862.00

5/1/2018 5,862.00 5,862.00

6/30/2018 11,724.00

11/1/2018 5,862.00 5,862.00

5/1/2019 233,700 2.000% 5,862.00 239,562.00

6/30/2019 245,424.00

11/1/2019 3,525.00 3,525.00

5/1/2020 235,000 3.000% 3,525.00 238,525.00

6/30/2020 242,050.00

468,700 41,440.40 510,140.40 510,140.40

XI-Q 2016F Refunding Debt Service Allocations for DAS

DOC Junction City Planning (Department of Corrections)

99

Date Principal Interest Debt Service

07/15/2015 - -

09/01/2015 - -

11/01/2015 - 31,447.50 31,447.50

05/01/2016 255,000.00 31,447.50 286,447.50

11/01/2016 - 13,979.12 13,979.12

05/01/2017 270,000.00 13,979.12 283,979.12

11/01/2017 - 8,279.12 8,279.12

05/01/2018 280,000.00 8,279.12 288,279.12

11/01/2018 - 2,679.12 2,679.12

05/01/2019 50,000.00 2,679.12 52,679.12

11/01/2019 - 1,451.00 1,451.00

05/01/2020 51,000.00 1,451.00 52,451.00

Totals: 651,000.00 52,776.72 703,776.72

2008 Series A COP, 15 Year

Debt Service Schedule / Semi-annual payments

Interest Payable Calculation

New debt interest payment $5,862.00

Remaining old debt payment 8,729.12

Total interest payment $14,591.12

Divide by 6 months $14,591.12/6=$2,431.85

Multiply by 2 months $2,431.85*2=$4,863.70

100

Interest Payable Entry

T-code 437 Establish estimated expense w/auto reverse

DR 3505 Expenditure Control

(comp obj 7250 Interest bonds)

CR 1230 Interest Payable – current

101

Current Liability Calculation

Principal payments due within one year = current liability

Reclassify current portion from noncurrent

New debt principal payment due in FY 18 $ .00

Old debt principal payments due in FY18 280,000.00

Balance to be reclassed $ 280,000.00

102

Current Liability Entry T-code 475R & 475 To record current portion of

bonds payable for year-end reporting

DR 1714 Bonds Payable – Noncurrent

CR 2951 System Clearing GL

DR 2951 System Clearing GL

CR 1276 Bonds Payable-Current

103

Arbitrage Rebate Payable

Arbitrage rebate payable represents amounts due to the Internal Revenue Service for interest earned on unspent bond or COP proceeds that exceeds legally allowable returns.

Liability must be adjusted at least annually.

104

Arbitrage Rebate Entry (part 1)

T-code 526 Record the full amount of the liability

Dr 3200 GAAP Revenue Offset

(comp obj 0800 Interest on Investments)

Cr 1719 Arbitrage Rebate Payable

105

Arbitrage Rebate Entry (part 2)

106

T-code 475R/475 To reclassify the current

portion of the liability

Dr 1719 Arbitrage Rebate Payable

CR 2951 System Clearing

DR 2951 System Clearing

Cr 1619 Arbitrage Rebate Payable-Current

Reclass Cash in Bank

Union Bank statement – Lottery bonds

→Reclass in R*Stars

Cash balances held at Treasury

→Disclosure

COP certificate accounts - DAS will provide necessary information

107

Reclass Cash in Bank Entry

T-code 474R/474 To reclassify cash to restricted

Dr 2951 System clearing

CR 0077 Cash in Bank

DR 0928 Cash-Restricted

Cr 2951 System Clearing

108

Disclosure Requirements

109

Changes in Debt Outstanding

110


111

DAFR 6610 & 6620

112

Debt Repayment Schedule

113

Payment Schedule

114

Debt Refunding

115These numbers may be found on page 13 of the handouts

Refunding Memo

116

Defeased Debt

117

Defeased Debt Schedule

118

Plan of Refunding

119

Disclosure Bloopers

LEARNING OPPORTUNITIES

120


121

6610/6620 Doesn’t Match

122

6610/6620 Doesn’t Match(continued)

DAFR 6620

GL Acct GL ACCT Title Prior Year Current Year

1276 BONDS PAYABLE-CURRENT - (595,000.00)

1714 BONDS PAYABLE-NONCURRENT (21,745,000.00) (33,212,938.29) (33,807,938.29)

1713 PREMIUM BONDS SOLD (2,942,781.30) (4,791,346.94)

DAFR 6610 - REVENUE

Compt Obj Compt Obj Title Current Year

1500 LONG TERM DEBT ISSUED (3,900,000.00)

1505 PROCEEDS FRM REFUNDING (8,162,938.29) (12,062,938.29)

1515 DEBT ISSUANCE PREMIUM-PROP (1,995,172.24)

DAFR 6610 - EXPENDITURE

Compt Obj Compt Obj Title Current Year

7450 AMORT-DISC/PREM ON BONDS 146,606.60 123

6610/6620 Doesn’t Match(continued)

124

Balances Don’t Agree

125

Netted Additions/Deductions

126

Netted Additions/Deductions(continued)

127

Refunding Disclosure Issues

128

Refunding Disclosure Issues(continued)

129

Refunding Disclosure Issues (continued)

130


131


132

Zero Balance

133

Duplication of Work

134

Proceeds being used for:

135

Does it make sense?

136

Questions?

137

Resources• OAMs:

• 15.65.10 Bonds and Certificates of Participation

• 15.65.20 Arbitrage

• 15.65.30 Debt Refunding

• Government Finance Officers Association Governmental Accounting, Auditing, and Financial Reporting Blue Book

• SARS analyst

138

139

Documents

Long-term Debt Training - oregon.gov Long-term Debt Training.pdfLong-term Debt Training Statewide Accounting and Reporting ... Bonds (Debt Service From General Fund) 29. Recording