What entry is made to recognize revenue transferred from the General Fund to the Debt Service Fund for debt payments?

Recognizing revenue transferred from the General Fund to the Debt Service Fund involves reflecting the inflow of resources into the Debt Service Fund. When a transfer is made, it is considered a financial transaction that does not affect the net income but rather represents a movement of funds between different governmental funds.

In this scenario, the proper entry would indeed involve debiting the Debt Service Fund’s Other Financing Sources – Transfer In account. This is appropriate because it increases the resources available in the Debt Service Fund, as it indicates that the Debt Service Fund is receiving funds from the General Fund explicitly for the purpose of paying off debt obligations. The term "Other Financing Sources" is used in governmental accounting to capture resources that are not generated from regular revenues such as taxes or fees but are instead transferred in from other funds.

This entry effectively reflects the financial support being provided to the Debt Service Fund and ensures that the fund's financial statement accurately represents its financial position.