Residents from the Town of Mountain View authorized a $5,000,000 renovation to their historic town hall on November 15, 2019. Financing for the project consists of $2,500,000 from a 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the General Fund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales tax imposed on every dollar of sales in the city.

Required
Prepare all necessary journal entries to record the related transactions in the town’s capital projects fund, debt service fund, and governmental activities at the government-wide level. You may ignore entries in the General Fund. The town has a calendar year-end.
a. Record the 2020 budget for the Serial Debt Service Fund. Sales taxes of $350,000 are expected to be collected in 2020; the only appropriation is expected to be six months of interest on the serial bond.
b. The town transfers $1,000,000 from the General Fund to a newly established capital projects fund.
c. Planning and architect’s fees for the town hall renovation are paid in the amount of $200,000.
d. The town hall renovation construction contract is awarded to a local contractor, Central Paving and Construction, for $4,500,000.
e. On April 1, 2020, the town issues serial bonds with a face value totaling $2,500,000 and having maturities ranging from one to 20 years at 102. The bonds bear interest of 5 percent per annum, payable semiannually on April 1 and October 1. Premiums on bonds issued must be deposited directly in the debt service fund and are restricted for debt service. (Remember to amend the debt service fund budget because this premium was not anticipated.) Premiums are amortized using the straight-line method over 40 interest periods.
f. The capital projects fund paid the city’s Utility Fund $50,000 for wiring associated with the renovation. No encumbrance had been recorded for this service.
g. On October 1, 2020, the city mailed checks to bondholders for semiannual interest on the bonds.
h. Sales taxes earmarked for debt service of $350,000 were collected.
i. Central Paving and Construction submitted a progress billing to the town for $2,500,000. The city’s public works inspector agrees that all milestones have been met for this portion of the work.
j. The town paid Central Paving and Construction the amount it had billed, except for 5 percent that was withheld as a retained percentage per terms of the contract.

k. Grant funds totaling $1,500,000 are received from the state historical society because eligible expenditures have been made.
l. At year-end, closing entries are made; $1,000,000 of the fund balance is assigned, and the remainder is restricted. (Ignore closing entries for governmental activities.)
m. Record the 2021 budget for the Serial Debt Service Fund; $300,000 of earmarked sales taxes are expected to be collected in 2021; appropriations include a $250,000 principal payment on April 1 and two serial bond interest payments.
n. Sales tax collections for debt service amounted to $250,000.
o. Central Paving and Construction submitted a final billing to the town for $2,000,000. Upon final inspection by the Public Works Department, a leak was discovered in the roof.
p. Public works employees installed a new sidewalk and landscaping at a total cost of $130,000.
q. The roof leak was repaired satisfactorily, and the city paid the final billing and all retainages.
r. The April 1 debt service payments are made.
s. The renovation is considered complete and appropriate amounts are reclassified as buildings and improvements other than buildings (i.e., landscaping). All capital projects fund nominal accounts are closed, and remaining cash in the capital projects fund is transferred to the debt service fund. (Remember to amend the debt service fund budget because this transfer was not anticipated.)