Question

Prepare journal entries for each of the following transactions entered into by the City of Loveland. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Transaction Fund / Governmental Activties General Journal Debit Credit 1. The city received a donation of land that is to be used by Parks and Recreation to develop a public park. At the time of the donation, the land had an acquisition value of $5,200,000 and was recorded on the donor’s books at a historical cost of $4,500,000. 1 General Fund Governmental Activities 2. The Public Works Department sold machinery with a historical cost of $35,100 and accumulated depreciation of $28,700 for $6,000. The machinery had originally been purchased with special revenue funds. 2 General Fund Governmental Activities 3. A car was leased for the mayor’s use. The first payment was $1,000 and the present value of the remaining lease payments was $29,000. (Note: The initial cash payment was made by the General Fund.) 3a General Fund 3b Governmental Activities Record the lease of car to the Mayor. 4. During the current year, a capital projects fund completed a new public safety building that was started in the prior year. The total cost of the project was $9,720,000. Financing for the project came from a $9,000,000 bond issue that was sold in the prior year and from a $720,000 federal capital grant received in the current year. Current-year expenditures for the project totaled $1,176,000. The full cost is attributed to the building because it was constructed on city-owned property. 4a Capital Project Fund Record the funds received for the public safety building. 4b Record the current year's expenditure for the public safety building. 4c Governmental Activities Record the funds received for the public safety building. 4d Record the current year's expenditure for the public safety building. 4e Record the transfer of the work in progress to the capital asset. 5. The city records a half year of straight-line depreciation on capital assets placed in service during the year. The building in item 4 above has an estimated 30-year life and no salvage value. 5 General Fund Governmental Activities 6. Due to technological developments, the city determined that the service capacity of some of the technology equipment used by general government had been impaired. The calculated impairment loss due to technology obsolescence was $1,156,000. 6 General Fund Governmental Activities

Answer 1

City of Loveland Journal Enteries Trans. Fund/GA 1 General Fund Debit in $ Credit in $ Particulars No Journal Entry Dr. 5200000 Governmental Activities Land a/c To Program Revenues - Culture and Recreation - Capital Grants and Contri. 5200000 2 General Fund 6000 Cash a/c Dr. To Other Financial Sources - Proceeds of Capital sale 6000 Governmental Activities Cash a/c Dr. Accum. Depre- Mach. & Equip. a/c Dr. Loss on sale of Machinery a/c Dr. To Machinery and Equipment 6000 28700 400 35100 3a. General Fund 30000 Expenditures - General Government a/c Dr. To Other Financing Sources - Lease agreement To Cash 29000 1000 3b. Dr. 30000 Governmental Activities Expenditures - General Government a/c To Lease Obligations Payable 30000 4a. Capital Project Fund Dr. 720000 Cash a/c To Revenues 720000 4b. Dr. 1176000 Construction Expenditures a/c To Cash 1176000 4c. Governmental Activities Cash a/c Dr. To Program Revenues - Public Safety - Capital Grants and Contributions 720000 720000 4d. Dr. 1176000 Construction Work in progress a/c To Cash 1176000 4e. 9720000 Buildings a/c Dr. To Construction Work in Progress 9720000 5 General Fund No Journal Entry Dr. 324000 Governmental Activities Depreciation Expense a/c To Accum. Depre - Buildings 9720000 / 30 324000 General Fund No Journal Entry Dr. 1156000 Governmental Activities Expenses - General Government a/c To Machinery Equipment 1156000