During FY 2023, the voters of Surprise County approved construction of a $21 million police facility and an $11 million fire station to accommodate the county's population growth. The construction will be financed by tax-supported bonds in the amount of $33 million, a $1 million economic stimulus grant, and a portion of future use tax revenues. During 2023, the following events and transactions occurred. Required a. Prepare journal entries to record the the following transactions in a single Surprise County Construction Fund, in a capital projects fund, and in the governmental activities general journal at the government-wide level. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in whole dollar amounts and not in millions.) > Answer is complete but not entirely correct. Transaction Fund / Governmental Activties General Journal Debit Credit 1. Issued $120,000 of 4 percent bond anticipation notes to cover preliminary planning and engineering expenses. Assume this note will be repaid when the bond is issued and thus can be considered long-term. 1 Construction Fund Cash Other Financing Sources-Proceeds of Bonds Anticipation Notes Governmental Activities Cash Bond Anticipation Notes Payable 120,000 120,000 120,000 120,000 2. Incurred and vouchered architecture and engineering costs in the amount of $62,000. They were split evenly between the two projects. (These items were not encumbered.) 2 Construction Fund Construction Expenditures-Police Construction Expenditures-Fire Vouchers Payable Governmental Activities Construction Work in Progress-Police Construction Work in Progress-Fire Vouchers Payable 31,000 31,000 62,000 31,000 31,000 62,000 3. Entered into a construction contract for $32 million$21 million was for the police facility and $11 million was related to the fire station. 3 Construction Fund Encumbrances-Police Encumbrances-Fire Encumbrances Outstanding-Police Encumbrances Outstanding-Fire Governmental Activities No Journal Entry Required 21,000,000 11,000,000 21,000,000 11,000,000 4. Issued the $33 million, 20-year 7 percent bonds at 101. (The premium would be recorded in a debt service fund. You do not need to record this entry.) Construction Fund 4 33,000,000 Cash Other Financing Sources-Proceeds of Bonds Governmental Activities Cash Bonds Payable Premium on Bonds Payable 33,000,000 33,330,000 33,000,000 330,000 5. Paid off the bond anticipation notes that had been outstanding 180 days. (Interest is an expenditure of the capital projects fund.) 5 Construction Fund Other Financing Uses-Retirement of Bond Anticipation Notes Interest Expenditures Cash Governmental Activities Bond Anticipation Notes Payable Expenses-Interest on BANS Cash 120,000 2,400 122,400 120,000 2,400 122,400 6. An invoice for $16 million was received from the contractor for a portion of police facility construction ($14 million) and fire station construction ($2 |million). 6a 6b Construction Fund Record the reversal of encumbrances. Encumbrances Outstanding-Police Encumbrances Outstanding-Fire Encumbrances-Police Encumbrances-Fire 14,000,000 2,000,000 14,000,000 2,000,000 Record the construction Work-in-progress of the police facility and the fire station in the capital project fund. Construction Expenditures-Police Construction Expenditures-Fire Contracts Payable 14,000,000 2,000,000 16,000,000 6c Governmental Activities Record the construction Work-in-progress of the police facility and the fire station. Construction Work in Progress-Police 14,000,000 Construction Work in Progress-Fire 2,000,000 16,000,000 Contracts Payable 7. Half of the grant funds were received in cash. 7 Construction Fund Cash Revenues 500,000 500,000 Governmental Activities Cash 500,000 Program Revenues-Economic Development-Capital Grants & 500.000 8. The initial construction invoice, less 5 percent retainage, was paid. 8 Construction Fund Contracts Payable Contracts Payable-Retained Percentage Cash 16,000,000 800,000 15,200,000 9. The fire station was completed, and a final invoice for the remaining $9 million was received. All fire station construction charges incurred can be capitalized as buildings. 9a Construction Fund Record the reversal of encumbrances. Encumbrances Outstanding-Fire Encumbrances-Fire 9,000,000 9,000,000 9b Record the completion of the fire station construction contract. Construction Expenditures-Fire 9,000,000 Contracts Payable 9,000,000 9c Governmental Activities Record the appropriation of funds towards completion the fire station. Construction Work in Progress-Fire 9,000,000 Contracts Payable 9,000,000 9d Record the completion of the fire station construction contract. Buildings 11,031,000 Construction Work in Progress-Fire 11,031,000 10. Following inspection, the fire station invoices were paid in full. 10 Construction Fund Contracts Payable Contracts Payable-Retained Percentage Cash 9,000,000 11. At year-end, the contractor billed the county an additional $6.5 million for the police facility; however, the police facility was incomplete. 11a Construction Fund Record the reversal of encumbrances. 11b Encumbrances Outstanding-Police Encumbrances-Police 0 6,500,000 6,500,000 Record the police facility construction work-in-progress. Construction Expenditures-Police 6,500,000 Contracts Payable 6,500,000 Governmental 11c Record the police facility construction work-in-progress. Activities Construction Work in Progress-Police 6,500,000 Contracts Payable 6,500,000 12. Temporary accounts were closed at year-end. Assume that the fund balances are all restricted. 12 Construction Fund Other Financing Sources-Proceeds of Bonds Anticipation Notes 120,000 Other Financing Sources-Proceeds of Bonds 33,000,000 Revenues Construction Expenditures-Police Construction Expenditures-Fire Interest Expenditures 500,000 20,531,000 11,031,000 2,400 Other Financing Uses-Retirement of Bond Anticipation Notes 120,000 Fund Balance-Restricted 1,935,600 Governmental Activities No Journal Entry Required b. Prepare a Surprise County Construction Fund balance sheet for the year ended December 31, 2023. (Enter your answers in whole dollar amounts and not in millions.) Cash Answer is complete but not entirely correct. SURPRISE COUNTY Construction Fund Balance Sheet December 31, 2023 Assets Total Assets Liabilities and Fund Balances Liabilities: Vouchers Payable Contracts Payable Contracts Payable-Retained Percentage Total Liabilities Fund Balances: Fund Balance-Restricted EA $ 0 $ 0 $ 62,000 6,500,000 0 6,562,000 1,935,600 Total Liabilities and Fund Balances $ 8,497,600