The City of McNeely sold bonds in the amount of $25,000,000 to finance the construction of a public health center. The bonds are serial bonds and were sold at par on January 1, the first day of a fiscal year. Shortly thereafter a construction contract in the amount of $22,000,000 was signed and the contractor commenced work. By year-end the contractor had been paid in full for all billings to date amounting to $12,000,000.Prepare, in general journal form, all journal entries that should have been made during the fiscal year ended December 31 to record the preceding information in the capital projects fund. (No closing entry is required).

What will be an ideal response?


CAPITAL PROJECTS FUND

?DebitsCredits
CASH25,000,000?
  OTHER FINANCING SOURCES-PROCEEDS OF BONDS?25,000,000

ENCUMBRANCES
22,000,000?
  ENCUMBRANCES OUTSTANDING?22,000,000

ENCUMBRANCES OUTSTANDING
12,000,000?
  ENCUMBRANCES?12,000,000

CONSTRUCTION EXPENDITURES
12,000,000?
  CONTRACTS PAYABLE?12,000,000

OTHER FINANCING SOURCES-
  PROCEEDS OF BONDS
25,000,000?
  FUND BALANCE-RESTRICTED?13,000,000
  CONSTRUCTION EXPENDITURES?12,000,000

Business

You might also like to view...

A company that specializes in rendering payroll services to client companies for a fee is a(n) ______________________________

Fill in the blank(s) with correct word

Business

After posting the second closing entry to the income summary account, the balance will be equal to

A) zero. B) owner's equity. C) revenues for the period D) the net income or (loss) for the period.

Business

Early adopters are more concerned with key functionality than complete feature sets

Indicate whether the statement is true or false

Business

Wedney, Inc sold a meat processing machine to Yoro Chickens, taking a security interest in the machine. Yoro Chickens defaulted on the loan. Wedney repossessed the machine. Wedney would like to retain the machine to use as a model. Which of the following statements is correct?

a. Wedney must notify the debtor that it intends to retain the machine and give Yoro 20 days to object. b. By taking possession, Wedney automatically foreclosed on the collateral. Wedney has valid title and need do nothing else. c. Since the machine is equipment, Wedney cannot retain the machine. Wedney must dispose of the collateral in a commercially reasonable manner. d. Wedney can retain the machine but must pay Yoro the surplus, the difference between the fair market value of the machine and the amount of the debt.

Business