(Accounting for and reporting on capital assets acquired using governmental funds)

Marilyn County operates on a calendar-year basis. It uses a Capital Projects Fund to account for major capital projects and a Debt Service Fund to accumulate resources to pay principal and interest on general obligation debt. It does not use encumbrance accounting in the Capital Projects Fund. The following transactions occur:

1. On January 1, 2004, Marilyn County issues general obligation bonds in the amount of $\$ 900,000$ to build a community center. The debt will be paid off in 30 equal semiannual installments of $\$ 30,000$ over a 15 -year period commencing October 1, 2004, with interest of 6 percent on the outstanding debt.

2. The Village realizes that the community center will cost more than it originally anticipated. On May 1, the Village transfers $\$ 20,000$ from its General Fund to its Capital Projects Fund to help meet project costs.

3. Construction is completed on July 1,2004 , and the community center is ready for occupancy. The Village pays the contractor a total of $\$ 920,000$ on July 1. The County anticipates that the community center will have a useful life of 20 years.
4. On September 30, 2004, the General Fund transfers an amount to the Debt Service Fund that is sufficient to pay the first debt service installment, which is due October 1.
5. The Village pays the debt service due on October 1.
Required: 1. Prepare journal entries to record the foregoing transactions in the Capital Projects Fund, the General Fund, and the Debt Service Fund.
2. Prepare adjustments needed to develop the governmental activities column of the government-wide financial statements.
3. Calculate the amount that Marilyn County will report in its December 31, 2004, government-wide statement of net assets as "invested in capital assets, net of related debt." Also, assuming all debt service installments are paid when due in 2005, calculate the amount "invested in capital assets, net of related debt" at December 31, 2005.