Advanced Accounting 12th edition

Beams/Anthony/Bettinghaus/Smith

Chapter 20.....p-20-11

Please help with this question from the text book.

On May 1, City of Cerone approved $10000000 issue of 6% general obligation bonds maturing at 20yrs. Proceeds will be used to finance construction of a new civic center. Total cost estimated at $15000000, the remaining $5000000 are financed by state grant which was awarded. How do you write the journal entries for the below transactions for a capital fund project?

1. July 1 the general fund loaned $500000 to the civic center construction fund for engineering and other expenses

2. Preliminary planning cost $320000 were paid to Eminem Co. There had been no encombrance for this cost.

3. Dec. 1 the bonds were sold at 101, the premium was transfered to the debt service fund

4. March 15 a contract for $12000000 was entered into with Candu Construction Co. for major part of project.

5. Orders were placed for materials estimated at $55000.

6. April 1 a partial payment of $2500000 was received from the state.

7. The ordered materials were received at cost of $51000 and were paid.

8. June 15 a progress billing of $2000000 was received from Candu for work done. The city will withhold 6% billing until the project is complete.