(General Ledger Entries, Statements) The following transactions took place in th
ID: 2392921 • Letter: #
Question
(General Ledger Entries, Statements) The following transactions took place in the town of Burchette during 20X3: 1. A bond issue of $12,000,000 was authorized for the construction of a library, and the estimated bond issue proceeds and related appropriations were recorded in the General Ledger accounts of a new Capital Projects Fund. 2. The bonds were sold at a premium or s90,000 3. The cost of issuing the bonds, $80,000, was paid. 4. An order was placed for materials estimated to cost $6,500,000. 5. Salaries and wages of $500,000 were paid. 6. The premium, net of bond issuance costs, was transferred to a Debt Service Fund. The following transactions took place during 20X4 7. The materials were received; the actual cost was $6,585,000. 8. Salaries and wages of $4,010,000 were paid 9. All outstanding bills were paid. 0. The project was completed. The accounts were closed, and the remaining balance was transferred to a Debt Service Fund a. Prepare all journal entries (budgetary and actual), including closing entries, to record the Required Capital Projects Fund transactions for 20X3 and 20X4. b. Prepare a Capital Projects Fund balance sheet as of December 31, 20x3. C. Prepare a Capital Projects Fund Statement of Revenues, Expenditures, and Changes in Fund Balance for the project, including (1) the year ended December 31, 20X3, and (2) a separate budgetary combined comparison statement for the years ended December 31, 20X3 and 20x4Explanation / Answer
TOWN OF BURCHETTE
Year
Journal Entry
Amount in $ (Debit)
Amount in $ (Credit)
20X3
Bank A/c …………………Dr.
To, Bond A/c……………Cr.
To, Capital Project Fund……………..Cr
(Being Bond issued on Premium)
12090000
12000000
90000
20X3
Capital Project Fund A/c………………………..Dr.
To, Bank A/c …………………………………………..Cr.
(Being Cost on issue of bond incurred)
80000
80000
20X3
Capital Project Fund A/c ….....Dr.
To, Bank A/c ………………………………………….Cr.
(Being Salaries & Wages Paid)
500000
500000
20X3
Capital Project Fund A/c………………………….Dr.
To, Debt Service Fund A/c…………………………………Cr.
(Being Amount Transferred to Debt Service Fund)
10000
10000
20X4
Capital Project Fund A/c ………………………………….Dr.
To Bank A/c ……………………………………………………..Cr.
(Being Material Purchased)
6585000
6585000
20X4
Capital Project Fund A/c ….....Dr.
To, Bank A/c ………………………………………….Cr.
(Being Salaries & Wages Paid)
4010000
4010000
LIABILITIES
AMOUNT
ASSETS
AMOUNT
BOND
12000000
CAPITAL PROJECT
11095000
DEBT SERVICE FUND
10000
BANK BALANCE
915000
TOTAL
12010000
TOTAL
12010000
EXPENDITURE
AMT IN $
20X3
AMT IN $
20X3
REVENUE
AMOUNT
MATERIAL PURCHASE
0
6585000
SALARIES & WAGES
500000
4010000
TOWN OF BURCHETTE
Year
Journal Entry
Amount in $ (Debit)
Amount in $ (Credit)
20X3
Bank A/c …………………Dr.
To, Bond A/c……………Cr.
To, Capital Project Fund……………..Cr
(Being Bond issued on Premium)
12090000
12000000
90000
20X3
Capital Project Fund A/c………………………..Dr.
To, Bank A/c …………………………………………..Cr.
(Being Cost on issue of bond incurred)
80000
80000
20X3
Capital Project Fund A/c ….....Dr.
To, Bank A/c ………………………………………….Cr.
(Being Salaries & Wages Paid)
500000
500000
20X3
Capital Project Fund A/c………………………….Dr.
To, Debt Service Fund A/c…………………………………Cr.
(Being Amount Transferred to Debt Service Fund)
10000
10000
20X4
Capital Project Fund A/c ………………………………….Dr.
To Bank A/c ……………………………………………………..Cr.
(Being Material Purchased)
6585000
6585000
20X4
Capital Project Fund A/c ….....Dr.
To, Bank A/c ………………………………………….Cr.
(Being Salaries & Wages Paid)
4010000
4010000
LIABILITIES
AMOUNT
ASSETS
AMOUNT
BOND
12000000
CAPITAL PROJECT
11095000
DEBT SERVICE FUND
10000
BANK BALANCE
915000
TOTAL
12010000
TOTAL
12010000
EXPENDITURE
AMT IN $
20X3
AMT IN $
20X3
REVENUE
AMOUNT
MATERIAL PURCHASE
0
6585000
SALARIES & WAGES
500000
4010000
Year
Journal Entry
Amount in $ (Debit)
Amount in $ (Credit)
20X3
Bank A/c …………………Dr.
To, Bond A/c……………Cr.
To, Capital Project Fund……………..Cr
(Being Bond issued on Premium)
12090000
12000000
90000
20X3
Capital Project Fund A/c………………………..Dr.
To, Bank A/c …………………………………………..Cr.
(Being Cost on issue of bond incurred)
80000
80000
20X3
Capital Project Fund A/c ….....Dr.
To, Bank A/c ………………………………………….Cr.
(Being Salaries & Wages Paid)
500000
500000
20X3
Capital Project Fund A/c………………………….Dr.
To, Debt Service Fund A/c…………………………………Cr.
(Being Amount Transferred to Debt Service Fund)
10000
10000
20X4
Capital Project Fund A/c ………………………………….Dr.
To Bank A/c ……………………………………………………..Cr.
(Being Material Purchased)
6585000
6585000
20X4
Capital Project Fund A/c ….....Dr.
To, Bank A/c ………………………………………….Cr.
(Being Salaries & Wages Paid)
4010000
4010000
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