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Problem 7-2(a) Village of Burchette Capital Projects Fund General Journal 20X3 1 2 Cash 12,820,000 OFS-Bond Principal Bonds Premium 12,000,000
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The problem is:
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 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 of $90,000.
3.The cost of issuing the bonds, $80,000, was paid.
4. An order was placed for material estimated to cost $6,500,000.
5. Salaries and wages of $500,000 were paid.
6. The premium, net bond of issuance costs, was transferred to a Debt Service Fund.
The following transactions took place in 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.
10. 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 Capital Projects Fund transfers for 20X3 and 20X4.
b. Prepare a Capital Projects Fund balance sheet as of December 31, 20X3.
