E11.5 Capital Asset Transactions

Suppose the City of Naperville, Illinois acquired the following capital assets in 2020:

1. Land infrastructure improvements were paid by the general fund at a cost of $2,400,000.

2. A used delivery van was purchased by the internal service fund at a cost of $10,000.

3. A building was purchased for $20,000,000 by the capital projects fund to serve as a youth center. The purchase was financed by a 20-year bond issue.

4. Machinery and equipment was purchased for $30,000 by the commuter parking enterprise fund. The purchase was financed by a bank loan.

Required: Prepare the entries needed to record the above transactions. For each entry, indicate the fund in which the entry is recorded, and how the asset, and liability if appropriate, are reported in the funds balance sheet.