(Journal entries and financial statements for an Enterprise Fund)

The following transactions relate to Walton City's Municipal Airport Fund for the fiscal year ended June 30, 2004:

1. The General Fund made a permanent contribution of $\$ 3$ million for working capital to start a municipal airport. The city used part of that money, together with the proceeds from a $\$ 25$ million revenue bond issue, to purchase an airport from a private company. The fair value of the assets and liabilities was as follows:

The city purchased the airport for the fair market value of its net assets.
2. Airlines were billed $\$ 3,700,000$ for rental rights to use ticket counters and landing and maintenance space. Of this amount, $\$ 3,690,000$ is expected to be collectible.
3. Supplies totaling $\$ 1,500$ were purchased on credit.
4. Collections from airlines totaled $\$ 3,680,000$.
5. Salaries of $\$ 200,000$ were paid to airport personnel employed by the city.
6. Utility bills totaling $\$ 100,000$ were paid.
7. A notice was received from the Last District Bankruptcy Court. Air Lussa was declared bankrupt. The airport collected only $\$ 1,000$ on its bill of $\$ 5,000$.
8. The airport obtained $\$ 3$ million of additional permanent contributions from the city to help finance improvements at the airport.
9. Interest of $\$ 2,125,000$ was paid to the bondholders.
10. Supplies used during the year totaled $\$ 1,200$.
11. The General Fund made an advance to the airport of $\$ 2$ million. This amount must be repaid within 5 years. Airport management plans to begin repaying the advance in 2005 .
12. A contract was signed with The Construction Company for the new facilities for a total price of $\$ 5$ million.
13. Airport management invested $\$ 2$ million in certificates of deposit.
14. Airport management received $\$ 315,000$ upon redeeming $\$ 300,000$ of the certificates of deposit mentioned in part (13).
15. The airport purchased additional equipment for $\$ 300,000$ cash.
16. Interest expense of $\$ 500,000$ was accrued at the end of the year.
17. Other accrued expenses totaled $\$ 50,000$.
18. Depreciation was recorded as follows:

19. Paid $\$ 13,000$ of Accounts payable.
20. Received $\$ 150,000$ of interest revenue.
21. Excess cash of $\$ 4.3$ million was invested in certificates of deposit.

Required: 1. Prepare the journal entries necessary to record the preceding transactions in the Municipal Airport Fund.
2. Prepare a trial balance at June 30, 2004.
3. Prepare a statement of revenues, expenses, and changes in net assets for the 2003-2004 fiscal year and a statement of net assets as of June 30, 2004.

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Accounts receivable Land Buildings Equipment Accounts payable $ 8,000 21,000,000 5,000,000 1,800,000 12,000