Question

In Fulbright County, the Culture and Recreation Department constructed a library in one of the county’s high-growth areas. The construction was funded by a number of sources. Below is selected information related to the Library Capital Project Fund. All activity related to the library construction occurred within the current fiscal year. The county operates on a calendar-year basis.

Required
Prepare a journal entry for capital projects fund and governmental activities at the government-wide level. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Transaction Fund / Governmental General Journal Debit Credit Activties 1. The county issued $6,000,000 of 4 percent bonds, with interest payable semiannually on January 1 and July 1. The bonds sold for 101 on February 1. Proceeds from the bonds were to be used for construction of the library, with all interest and premiums received to be used to service the debt issue. Assume the premium and interest are recorded directly in the debt service fund. Capital Projects Fund Governmental Activities Activities 2. A $650,000 federal grant was received to help finance construction of the library. 2 Capital Projects Fund Governmental Activities

Answer 1

Fulbright County Journal Enteries Trans. Fund 1 Capital Projects Fund Particulars Cash a/c Dr. To Other Financing Sources-Proceeds of Bonds Debit in $ Credit in $ 6000000 6000000 Dr. 6080000 Governmental Activities Cash a/c To Bonds Payable To Premium on Bonds Payable To Interest Payable 6000000 x 101/100 = 60000; 6000000 x 4% x 1/12 = 20000 6000000 60000 20000 2 Capital Projects Fund Cash a/c To Revenues Dr. 650000 650000 650000 Governmental Activities Cash a/c Dr. To Program Revenues-Culture and Recreation- Capital Grants and Contributions 650000 3 Capital Projects Fund 250000 Cash a/c Dr. To Other Financing Sources-Interfund Transfers in 250000 Governmental Activities No Journal Entry Required Capital Projects Fund 6800000 Encumbrances a/c Dr. To Encumbrances Outstanding 6800000 Governmental Activities No Journal Entry Required 5a. Capital Projects Fund 6800000 Encumbrances Outstanding a/c Dr. To Encumbrances (Record the completion of construction of the library) 6800000 5b. Construction Expenditures a/c Dr. 6890000 To Cash (Record the payment upon completion of capital project) 6890000 5c. Dr. 6890000 Governmental Activities Construction Work in Progress a/c To Cash 6890000 Land a/c Dr. Buildings a/c Dr. Machinery and Equipment a/c Dr. To Construction Work in Progress (Record the capitalization of each item) 200000 6295000 395000 6890000 ба. Capital Projects Fund Dr. Other Financing Sources-Proceeds of Bonds a/c Dr. 6000000 Other Financing Sources-Interfund Transfers In a/c Dr 250000 Revenues a/c 650000 To Construction Expenditures To Fund Balance-Restricted (Close the temporary accounts to Fund Balance-Restricted) 6890000 10000 6b. 10000 Interfund Transfers Out a/c Dr. To Cash (Record the transfer to the debt service fund.) 10000 6. Fund Balance-Restricted a/c Dr. 10000 To Interfund Transfers Out (Close the remaining temporary account to Fund Balance-Restricted.) 10000 6d. Governmental Activities No Journal Entry Required