Accrues interest on the revenue bonds as of december

Assignment Help Accounting Basics
Reference no: EM13871205

The Metro Central Railroad is a commuter railroad that stops at the Village of Katonah. Katonah, a growing community, decides to construct and operate a parking lot near the railroad station to accommodate the needs of its citizens. The activities of the parking lot will be accounted for in an Enterprise Fund known as the Katonah Metro Parking Fund because the activity will be financed with debt secured solely by pledge of the facility net revenues from parking fees. This problem covers transactions and events during calendar years 2012 and 2013. Prepare journal entries for the following Parking Fund transactions and events during 2012:
1. Receives $ 5,000,000 from the sale of revenue bonds at par. The revenue bonds were sold on July 1, 2012. They mature at the rate of $ 250,000 a year over a period of 20 years, starting July 1, 2013. Interest on the bonds is payable annually, also starting July 1, 2013, at 4 percent per annum on the outstanding debt.
2. Pays $ 1,000,000 to acquire a vacant lot near the railroad station.
3. Pays $ 4,000,000 to construct the parking lot.
4. Accrues interest for 6 months on the serial bonds. (Although interest during the construction period should be capitalized in Enterprise Funds, the village considers the amount immaterial and charges it to expense.)
5. Receives an invoice for $ 80,000 from the Village of Katonah General Fund for all expenses incurred in financing and planning for constructing the parking lot. Based on the foregoing transactions and events, the Katonah Metro Parking Fund starts calendar year 2013 with the following trial balance:

684_374-B-A-N-P-O (365).png

The Metro Central Railroad is a commuter railroad that stops
Prepare journal entries to record the following transactions and events of the Katonah Metro Parking Fund for calendar year 2013. Then prepare a statement of revenues, expenses, and changes in net position for the year and a statement of net position as of December 31, 2013.
1. Receives cash from parking fees in the amount of $ 800,000.
2. Receives cash of $ 60,000 in December 2013 from parking lot customers who rent space for the month of January 2014.
3. Pays the amount due at the start of the year to the Village of Katonah.
4. Pays the following expenses salaries$ 125,000 insurance,$ 20,000 utilities,$ 35,000.
5. Pays the first installment of principal and interest on the revenue bonds, due July 1, 2013.
6. Accrues interest on the revenue bonds as of December 31, 2013.
7. Records one year depreciation on the depreciable assets. The depreciable assets are estimated to have a useful life of 20 years.

Reference no: EM13871205

Questions Cloud

What basis of accounting should be used in fund : What basis of accounting should be used in fund level accounting for each of the following funds and why?General Fund Special Revenue Funds Enterprise Funds
What are the disadvantages of write off method accounts : Describe how (and when) the direct write-off method accounts for uncollectible accounts. What are the disadvantages of this method?
Determine the capacitance : Problem: A 50kW load operates from a 60 Hz 10 kV line with a power factor of 60% lagging. Determine the capacitance that must be placed in parallel with the load to achieve a 90% lagging power factor.
Draw two force diagrams showing all the forces : Choose axes- Draw a diagram, marking clearly your choice of coordinate axes and draw force diagrams! Modelling the blocks as particles, draw two force diagrams showing all the forces acting on the two particles
Accrues interest on the revenue bonds as of december : Accrues interest on the revenue bonds as of December 31, 2013 Records one year depreciation on the depreciable assets. The depreciable assets are estimated to have a useful life of 20 years.
What legal principles relate to this scenario : What ethical principles relate to this case scenario? What legal principles relate to this scenario? What might the legal consequences be to the health care organization if there is a delay in treatment
What amount of net income would the phone company report : What amount of Sales, Bad Debt Expense, and Net Income would the phone company report from these events in 2015 and 2016 if it used the allowance method of accounting for uncollectible accounts? Assume the company estimates 5 percent of credit sales ..
Prove the fifth fact from the subsection on syndicate theory : Prove the fifth fact from the subsection on syndicate theory. The key is to find out the right values for the constants ki . The ki are defined so that the first-order conditions all hold and the adding up condition holds.
Oxide reacts with 11.5 grams of carbon monoxide : If 12.8 grams of iron (III) oxide reacts with 11.5 grams of carbon monoxide to produce 6.10 g of pure iron, what are the theoretical yield and percent yield of this reaction? Be sure to show the work that you did to solve this problem.unbalanced equa..

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd