Prepare journal entries required in capital-projects fund

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Reference no: EM132178281

Question - The City of Little River had the following transactions related to the construction of a new courthouse:

January 2, 2017: 20-year, 6%, general-obligation serial bonds with a face value of $2,000,000 are issued at 101. Interest payments are made on January 1 and July 1 of each year. The premium was transferred into the debt-service fund. The general fund will fully fund each payment as it becomes due.

March 1, 2017: Land is purchased for a new park at a cost of $200,000.

March 1, 2017: A contract is signed for landscaping and construction of various structures in the park in the amount of $1,800,000.

June 15, 2017: $110,000 is transferred from the general fund for the July 1 payment due on the courthouse-fund serial bonds.

July 1, 2017: Interest ($60,000) and principal ($50,000) are paid on the courthouse-fund serial bonds.

December 1, 2017: The city receives an invoice for progress completed to date on the courthouse construction project in the amount of $385,000.

December 27, 2017: $58,500 is transferred from the general fund for the January 1, 2018 interest payment due on the courthouse-fund serial bonds.

Interest is accrued as of December 31, 2017, following the exception permitted by the GASB.

Required: Prepare the journal entries required in both the capital-projects fund and the debt-service fund using the template provided in this module.

Reference no: EM132178281

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