Reference no: EM132745061

Question: Prepare journal entries to record all the transactions, and identify the fund(s) used. statement of revenues, expenditures, and changes in fund balance for Westcomm's Capital Projects Fund for the year ended December 31 of the current year.

The City of Westcomm had the following transactions during the current calendar year. The transactions relate to financing and constructing a new firehouse. Westcomm uses budgetary accounting in its Capital Projects Fund. Prepare journal entries to record all the transactions, and identify the fund(s) used. statement of revenues, expenditures, and changes in fund balance for Westcomm's Capital Projects Fund for the year ended December 31 of the current year.

1. Westcomm adopted a budget for the Capital Projects Fund on January 1, based on the following assumptions:

Bonds would be issued for $2,000,000.

Westcomm would transfer $300,000 from its General Fund, and the state would contribute $200,000.

Contracts would be awarded for $2,500,000 million.

2. On February 1, Westcomm issued $2,000,000 of 5 percent general obligation bonds to build a new firehouse. Principal and interest payments are to be made each February 1 and August 1 for 20 years, starting August 1 of the current year. Principal is amortized in equal semiannual payments of $50,000. The bonds were sold for $2,030,000.

3. On February 1, Westcomm contracted with Howard Consultants for $100,000 to supervise construction.

4. On February 1, the Capital Projects Fund invested $1,000,000 in a CD.

5. On February 1, Westcomm entered into a contract with Eddie Construction to build the firehouse for $2,400,000.

6. The CD matured on June 1. Westcomm recorded the check for $1,010,000, which included $10,000 of interest, in the Capital Projects Fund.

7. Westcomm transferred $300,000 from its General Fund to the Capital Projects Fund to help pay for construction of the firehouse.

8. Eddie Construction completed work on June 30. It billed Westcomm $2,400,000. Westcomm paid the bill less 10 percent retainage, pending final inspection of Eddie's work by Howard Consultants.

9. On July 10, Howard Consultants advised Westcomm that Eddie had completed all work to its satisfaction. Westcomm advised the state that work on the firehouse was completed. The state promptly wired its contribution of $200,000 to Westcomm.

10. On July 15, Westcomm paid the retainage to Eddie and also paid Howard the full $100,000 due on its contract.

11. On July 20, all cash remaining in the Capital Projects Fund was transferred to the Debt Service Fund to help defray the principal and interest payment due in August.

12. On July 31, the General Fund transferred to the Debt Service Fund the balance needed to pay the August installment of debt service.

13. On August 1, the Debt Service Fund paid the first installment of debt service on the bonds issued to build the firehouse.