26 0.75 points Skipped eBook Exercise 6-26 (Static) Comprehensive Capital Assets/Serial Bond Problem [LO 6-2, LO 6-5] Residents from the Town of Mountain View authorized a $5,000,000 renovation to their historic town hall on November 15, 2022. 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. You may ignore entries in the General Fund. The town has a calendar year-end. Required Prepare 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. (Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field.) Print References Transaction Fund / Governmental Activities General Journal Debit Credit a. Record the 2023 budget for the Serial Debt Service Fund. Sales taxes of $350,000 are expected to be collected in 2023; the only appropriation is expected to be six months of interest on the serial bond. a Debt Service fund Capital Projects Fund Governmental Activities b. The town transfers $1,000,000 from the General Fund to a newly established capital projects fund. Debt Service fund b Capital Projects Fund Governmental Activities c. Planning and architect's fees for the town hall renovation are paid in the amount of $200,000. Debt Service fund C Capital Projects Fund Governmental Activities d. The town hall renovation construction contract is awarded to a local contractor, Central Paving and Construction, for $4,500,000. d Debt Service fund Capital Projects Fund Governmental Activities e. On April 1, 2023, 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. e(1) e(2) Debt Service fund Record the issue of bonds in the Debt Service Fund 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.) e(3) Capital Projects Fund Premiums are amortized using the straight-line method over 40 interest periods. Record the issue of bonds. e(4) Governmental Activities Record the issue of bonds. 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. Debt Service fund f Capital Projects Fund Governmental Activities g. On October 1, 2023, the city mailed checks to bondholders for semiannual interest on the bonds. g Debt Service fund Capital Projects Fund Governmental Activities h. Sales taxes earmarked for debt service of $350,000 were collected. h Debt Service fund Capital Projects Fund Governmental Activities 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. i Debt Service fund Record the reversal of encumbrances for the progress to date on the project and also the construction expenditure for the invoice received. Capital Projects Fund Governmental Activities 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. j Debt Service fund Capital Projects Fund Governmental Activities k. Grant funds totaling $1,500,000 are received from the state historical society because eligible expenditures have been made. k Debt Service fund Capital Projects Fund Governmental Activities I. At year-end, closing entries are made; in the capital projects fund, $1,000,000 of the fund balance is assigned, and the remainder is restricted. I(1) Debt Service fund 1(2) Record the entry to close the operating statement account in the Debt Service Fund. 1(3) Capital Projects Fund Record the entry to close the budgetary statement account in the Capital Projects Fund. m. Record the 2024 budget for the Serial Debt Service Fund; $300,000 of earmarked sales taxes are expected to be collected in 2024; appropriations include a $250,000 principal payment on April 1 and two serial bond interest payments. m Debt Service fund Capital Projects Fund Governmental Activities n. Sales tax collections for debt service amounted to $250,000. n Debt Service fund Capital Projects Fund Governmental Activities 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. Debt Service fund Record the reversal of encumbrances for the progress to date on the project and also the construction expenditure for the invoice received. Capital Projects Fund Governmental Activities p. Public works employees installed a new sidewalk and landscaping at a total cost of $130,000. P Debt Service fund Capital Projects Fund Governmental Activities q. The roof leak was repaired satisfactorily, and the city paid the final billing and all retainages. q Debt Service fund Capital Projects Fund Governmental Activities + r. The April 1 debt service payments are made. Debt Service fund Capital Projects Fund Governmental Activities s. The renovation is considered complete, and appropriate amounts are reclassified as buildings and improvements other than buildings (i.e., landscaping). s(1) Debt Service fund s(2) 5(3) Capital Projects Fund 5(4) s(5) 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.) Record the receipt for debt service payments. Record the transfer of capital project funds to the debt service fund. Record the closing entry after transfer out. s(6) Governmental Activities Record the closing entry and reclassify the appropriate amounts