EX. 3-4 Encumbrances are recorded in a capital projects fund similar to a general fund. Wickliffe County authorized the issuance of bonds and contracted with the USA Construction Company (UCC) to build a new sports complex. During 20X7, 20X8, and 20X9, the county engaged in the transactions that follow. All were recorded in a capital projects fund. 1. In 20X7, the county issued $310 million in bonds (and recorded them as "bond proceeds," an account com- parable to a revenue account). 2. It approved the sports complex contract for $310 mil- lion and encumbered the entire amount. 3. It received from UCC an invoice for construction to date for $114 million, an amount that the county rec- ognized as an expenditure. 4. It paid UCC the amount owed. 5. In 20X8, it received from UCC an invoice for an addi- tional $190 million. 6. It paid the amount in full. 7. In 20X9, UCC completed the sports facility and billed the county an additional $7 million. The county approved the additional costs, even though the total cost was now $311 million, $1 million more than initially estimated. 8. The county transferred $1 million from the general fund to the capital projects fund. E E lic ba