EXERCISE 18-3 Identify the Interfund Activity LO 11 The following events take place: 1. The Special Revenue Fund transfers $8,000 to the Internal Service Fund as a temporary loan. 2. The Internal Service Fund bills the Special Revenue Fund $20,000 for services performed. 3. Interest payments in the amount of $14,000 that are the responsibility of the Debt Service Fund are paid by the General Fund. 4. The unexpended balance of the Capital Projects Fund, which is $65,000, is transferred to the General Fund. Chapter 18 Introduction to Accounting for State and Local Governmental Units 5. Current expendable revenues of the Trust Fund in the amount of $35,000 are transferred to the Special Revenue Fund. 6. The General Fund transfers $100,000 to start an Internal Service Fund. Required: A. Identify the interfund activity as a loan, services provided and used, interfund transfer, or interfund reimbursement and prepare entries in general journal form to record the transac- tions on the records of the funds involved. B. Why is it important to distinguish residual equity transfers from operating transfers