In a special election held May 1, 2014 the voters of the City of Cerone approvedd $10,000,000 issue of 6% general obligation bonds maturing in 20 years. The proceeds of this sale will be used to help finance the construction of a new civic center. The total cost of the project was estimated at $15,000,000. The remaining $5,000,000 will be financed by a state grant which has been rewarded. A capital projects fund was established. The formal project authorization was appropriately recorded in a memorandum entry. The following transactions occurred.

1. The general fund loaned $500,000 to the CPF for defraying engineering and other expenses

2. preliminary engineering and planning costs of $320,000 were paid to Eminem Engineering and there were no encumbrances.

3. The bonds were sold at 101.

4. A contract for 12,000,000 was entered into with Candu construction

5. orders were placed for materials estimated at $55,000

6. a partial payment of 2,500,000 was received from the state

7. the materials that were previously ordered were received and paid at a cost of 51,000

8. A progress billing of 2,000,000 was received from Candu. As per terms of the contract the city withheld 6% of any billing until project completion

9. the general fund was repaid 500,000

Part 1-Prepare journal entries to record the transactions for the CPF and the appropriate closing entries.

Part 2 - prepare a balance sheet.