Journal entries and financial statements for an Enterprise Fund The Metro Central Railroad is a commuter railroad that stops at the Village of Kelly, Kely, a growing community, decides to construct and operate a parking lot near the railroad station to accommodate the needs of its citizens. The activities of the parking lot wil be accounted for in an Enterprise Fund, known as the Kelly Metro Parking Fund, because the activity will be financed with debt secured solely by pledge of the facility's net revenues from parking fees. This problem covers transactions and events during calendar years 2017 and 2018 a. Prepare journal entries for the following Kelly Metro Parking Fund transactions and events during 2017: 1. Receives 55,000,000 from the sale of revenue bonds at par. The revenue bonds were sold on July 1, 2017. They mature at the rate of $250,000 a year over a period of 20 years, starting July 1, 2018. Interest on the bonds is payable annually, ako starting July 1, 2018, at percent per annum on the outstanding debt. 2. Pays 51,000,000 to acquire a vacant lot near the railroad station 3. Pays 54,000,000 to construct the parking lot. The lot is completed and ready for opening as of December 31, 2012 4. Accrues interest for 6 months on the serial bonds. Interest expense is not capitalized) 5. Receives an invoice for $80.000 from the Village of Kelly General Fund for all expenses incurred in financing and planning for constructing the parking lot. Based on the foregoing transactions and events, the Kely Metro Parking and starts calendar year 2018 with the follow balance an invoice for $80,000 from the Village of Kelly General Fund for all expenses incurred in financing and planning for constructing the parking lot. Based on the foregoing transactions and events, the Kelly Metro Parking Fund starts calendar year 2018 with the following trial balance: Debits Credits Land $1,000,000 Parking lot 4,000,000 Accrued interest payable $ 100.000 Due to General Fund 80.000 Revenue bonds payable 5.000.000 Net position 180.000 Total 55.100.000 55.100.000 Ref. Description Debit Credit 1 2 3 . 4 5 b. Prepare journal entries to record the following transactions and events of the Kelly Metro Parking Fund for calendar year 2018. Then prepare a statement of revenues, expenses, and changes in net position for the year and a statement of net position as of December 31, 2018 1. Receives cash from parking fees in the amount of $800,000 2. Receives cash of $60,000 in December 2018 from parking lot customers who rent space for the month of January 2019, 3. Pays the amount due at the start of the year to the General Fund, 4. Pays the following expenses salaries --$125.000, insurance-$20,000 titles-535.000 5. Pays the first installment of principal and interest on the revenue bonds, due July 1, 2018 6. Accrues interest on the revenue bonds as of December 31, 2018 7. Records one year's depreciation on the parking lot. The parking lot has been estimated to have a useful life of 20 years Ref. Description Debit Credit > 1 2 . 3 . 4 Salaries expense Insurance expense . 5 Revenue bonds payable Interest expense 6 7 Use a negative sign with your answer to indicate a negative net position. Otherwise do not use a negative sign with your answers. Village of Kelly Kelly Metro Parking Enterprise Fund Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended December 31, 2018 Operating revenues-parking fees $ Operating expenses: Salaries expense Insurance expense Utilities expense Depreciation expense Total operating expenses Operating income Nonoperating expenses: Interest expense Change in net position Net position Beginning of year End of year Use a negative sign with your answer to indicate a negative net position. Otherwise do not use a negative sign with your answers. Village of Kelly Kelly Metro Parking Enterprise Fund Statement of Net Position December 31, 2018 Assets Current assets - cash $ Noncurrent assets: Land Parking lot, net of accumulated depreciation Total assets 5 Liabilities Current liabilities: Deferred rental income $ Accrued interest payable Current portion of revenue bonds payable Total current liabilities Noncurrent liabilities: Long-term portion of revenue bonds payable Total liabilities Net Position Net investment in capital assets Assets $ HA Current assets - cash Noncurrent assets: Land $ $ Parking lot, net of accumulated depreciation Total assets Liabilities Current liabilities: $ Deferred rental income Accrued interest payable Current portion of revenue bonds payable Total current liabilities Noncurrent liabilities: Long-term portion of revenue bonds payable Total liabilities Net Position Net investment in capital assets Unrestricted net position Total net position $ Journal entries and financial statements for an Enterprise Fund The Metro Central Railroad is a commuter railroad that stops at the Village of Kelly, Kely, a growing community, decides to construct and operate a parking lot near the railroad station to accommodate the needs of its citizens. The activities of the parking lot wil be accounted for in an Enterprise Fund, known as the Kelly Metro Parking Fund, because the activity will be financed with debt secured solely by pledge of the facility's net revenues from parking fees. This problem covers transactions and events during calendar years 2017 and 2018 a. Prepare journal entries for the following Kelly Metro Parking Fund transactions and events during 2017: 1. Receives 55,000,000 from the sale of revenue bonds at par. The revenue bonds were sold on July 1, 2017. They mature at the rate of $250,000 a year over a period of 20 years, starting July 1, 2018. Interest on the bonds is payable annually, ako starting July 1, 2018, at percent per annum on the outstanding debt. 2. Pays 51,000,000 to acquire a vacant lot near the railroad station 3. Pays 54,000,000 to construct the parking lot. The lot is completed and ready for opening as of December 31, 2012 4. Accrues interest for 6 months on the serial bonds. Interest expense is not capitalized) 5. Receives an invoice for $80.000 from the Village of Kelly General Fund for all expenses incurred in financing and planning for constructing the parking lot. Based on the foregoing transactions and events, the Kely Metro Parking and starts calendar year 2018 with the follow balance an invoice for $80,000 from the Village of Kelly General Fund for all expenses incurred in financing and planning for constructing the parking lot. Based on the foregoing transactions and events, the Kelly Metro Parking Fund starts calendar year 2018 with the following trial balance: Debits Credits Land $1,000,000 Parking lot 4,000,000 Accrued interest payable $ 100.000 Due to General Fund 80.000 Revenue bonds payable 5.000.000 Net position 180.000 Total 55.100.000 55.100.000 Ref. Description Debit Credit 1 2 3 . 4 5 b. Prepare journal entries to record the following transactions and events of the Kelly Metro Parking Fund for calendar year 2018. Then prepare a statement of revenues, expenses, and changes in net position for the year and a statement of net position as of December 31, 2018 1. Receives cash from parking fees in the amount of $800,000 2. Receives cash of $60,000 in December 2018 from parking lot customers who rent space for the month of January 2019, 3. Pays the amount due at the start of the year to the General Fund, 4. Pays the following expenses salaries --$125.000, insurance-$20,000 titles-535.000 5. Pays the first installment of principal and interest on the revenue bonds, due July 1, 2018 6. Accrues interest on the revenue bonds as of December 31, 2018 7. Records one year's depreciation on the parking lot. The parking lot has been estimated to have a useful life of 20 years Ref. Description Debit Credit > 1 2 . 3 . 4 Salaries expense Insurance expense . 5 Revenue bonds payable Interest expense 6 7 Use a negative sign with your answer to indicate a negative net position. Otherwise do not use a negative sign with your answers. Village of Kelly Kelly Metro Parking Enterprise Fund Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended December 31, 2018 Operating revenues-parking fees $ Operating expenses: Salaries expense Insurance expense Utilities expense Depreciation expense Total operating expenses Operating income Nonoperating expenses: Interest expense Change in net position Net position Beginning of year End of year Use a negative sign with your answer to indicate a negative net position. Otherwise do not use a negative sign with your answers. Village of Kelly Kelly Metro Parking Enterprise Fund Statement of Net Position December 31, 2018 Assets Current assets - cash $ Noncurrent assets: Land Parking lot, net of accumulated depreciation Total assets 5 Liabilities Current liabilities: Deferred rental income $ Accrued interest payable Current portion of revenue bonds payable Total current liabilities Noncurrent liabilities: Long-term portion of revenue bonds payable Total liabilities Net Position Net investment in capital assets Assets $ HA Current assets - cash Noncurrent assets: Land $ $ Parking lot, net of accumulated depreciation Total assets Liabilities Current liabilities: $ Deferred rental income Accrued interest payable Current portion of revenue bonds payable Total current liabilities Noncurrent liabilities: Long-term portion of revenue bonds payable Total liabilities Net Position Net investment in capital assets Unrestricted net position Total net position $