Assume that Stafford Township decided to construct a bridge in 2018 that is expected to cost $3,000,000. The bridge construction and related costs are to be financed as follows;

Federal Grant $1,200,000

Bond Issue Proceeds 1,500,000

Transfer from the General Fund 300,000

$3,000,000

The Federal Grant is for 40% of the qualifying project expenditures with a maximum grant limit of $1,200,000. It is an expenditure driven grant. Any excess unearned grant cash received will be refunded to the federal government at the completion of the project. Stafford Township applies encumbrances to control expenditures.

The bridge is to be constructed by Ace Construction Company. The Stafford Township government workforce will perform all earthmoving & landscaping work. The estimated cost of the bridge is as follows:

Bridge Structure

Ace Construction Company $2,400,000

Earthmoving & landscaping

Stafford Township 600,000

3,000,000

Please fill in Jounral entry:

1	Budgetary Entry - Revenues
	Account		Debit		Credit
	Estimated Revenues - Federal Grant		1,200,000
	Estimated Other Financing Sources - Bond		1,500,000
	Estimated Other Financing Sources - Transfer		300,000
	Appropriations - Bridge Structure				3,000,000
2	Budgetary Entry - Expenditures
	Account		Debit		Credit
3	Ace Construction Company signs a contract and begins work on the bridge
	Account		Debit		Credit
4	The General Fund transfers $300,000 to the Capital Project Fund as seed money to start operations
	Account		Debit		Credit
5	Egg Harbor Township issues bonds at a premium at $1,500,000. Bond Issue Costs paid to the
	underwriter (Morgan Stanley) was $5,000
	Account		Debit		Credit
6	Egg Harbor Township transferred the Excess of the Bond Premium over issue costs to the
	Debt Service Fund
	Account		Debit		Credit
7	Egg Harbor Township incurred Earthmoving Expenses of $400,000 in 2018
	Account		Debit		Credit
8	Egg Harbor Township paid actual Earthmoving Expenses of $400,000 in 2018
	Account		Debit		Credit
9	Egg Harbor Township paid Ace Construction Company $1,200,000 in 2018
	Account		Debit		Credit
10	Egg harbor Township sends a list of expenditures incurred in 2018 to the Federal Government
	for Reimbursement. The reimbursement was subject to the qualifying expenditure percentage.
	Account		Debit		Credit
11	Egg Harbor Township invests $500,000 in a U.S. Treasury Note at 5% maturing 10 years
12	The U.S. Treasury Note's accrued interest and increase in appreciated value at year's end is $12,500