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Question - In 2017, Oneida County constructs 10 miles of a new highway at a cost of $10 million, all of which was raised through the issuance of general obligation bonds. Engineers estimate that the highway will have a 50 year useful life and that the country will have to incur $0.3 million in cost per year to keep it functioning at a specified level of condition.
1. Prepare an appropriate journal entry to record the initial construction cost in a governmental fund (such as a capital projects fund). Indicate the amount that the government would record in its government wide financial statements.
2. Prepare a journal entry to reflect how the country would report the road's first year depreciation in its government wide statements.
3. Prepare the journal entries to record the 0.3 million in road preservation cost in a government fund. Prepare a second entry to reflect the costs in the government wide statements.
4. Prepare the journal entry to reflect the annual depreciation of the road preservation cost in the government wide statements. Is it necessary to record depreciation in the governmental fund?
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Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.
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