Journal entries and financial statements for an Enterprise Fund

The Metro Central Railroad is a commuter railroad that stops at the Village of Kelly. Kelly, 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 will 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.

The following transactions and events occurred in $2020$:

$1.$ Receives $$9,000,000$ from the sale of revenue bonds at par. The revenue bonds were sold on

July $1,2020.$ They mature at the rate of $$450,000$ a year over a period of $20$ years, starting

July $1,2021.$ Interest on the bonds is payable annually, also starting July $1,2021,$ at $4$ percent per annum

on the outstanding debt.

$2.$ Pays $$1,800,000$ to acquire a vacant lot near the railroad station.

$3.$ Pays $$7,200,000$ to construct the parking lot. The lot is completed and ready for opening as of

December $31,2020.$

$4.$ Accrues interest for $6$ months on the serial bonds. $[$Interest expense is not capitalized.$]$

$5.$ Receives an invoice for $$144,000$ 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 $2021$

with the following trial balance:

Metro Central Railroad

Trial Balance

December $31,2020$

Debit Credit

Land $$1,800,000$

Parking lot $7,200,000$

Accrued interest payable $$180,000$

Due to General Fund $144,000$

Revenue bonds payable $9,000,000$

Net position $324,0000$

Totals $$9,324,000$ $$9,324,000$

The following transactions occurred in $2021$:

$1.$ Receives cash from parking fees in the amount of $$1,440,000.$

$2.$ Receives cash of $$108,000$ in December $2021$ from parking lot customers who paid in advance

for parking space for the month of January $2022.$

$3.$ Pays the amount due at the start of the year to the General Fund.

$4.$ Pays the following expenses: salaries$$ $$225,000$; insurance$$ $$36,000$; utilities$$ $$63,000.$

$5.$ Pays the first installment of principal and interest on the revenue bonds, due July $1,2021.$

$6.$ Accrues interest on the revenue bonds as of December $31,2021.$

$7.$ Records one year$$s depreciation on the parking lot. The parking lot has been estimated to have a useful

life of $20$ years.

a$)$ Prepare journal entries to record the transactions and events in $2020.$

b$)$ Prepare journal entries to record the transactions and events in $2021.\backslash$table$[[$Account$,$Debit,Credit$],[,0,0],[,0,0],[$To record proceeds from sale of revenue bonds.$],[,0,0],[$v$,0,0],[$To record purchase of land.$],[,0,0],[$v$,0,0],[$To record cost of constructing parking lot.$],[,0,0],[,0,0],[$To record interest on serial bonds.$],[,0,0],[,0,0],[$To record planning and financing costs related to construction.,,$]]\backslash$table$[[$A$.,$Debit,Credit$],[,v,0],[,v,0,0],[$To record proceeds from sale of revenue bonds.$],[,vv,0,0],[,v,0,0],[$To record purchase of land.$],[,vv,0,0],[,vv,0,0],[$To record cost of constructing.parking lot.$],[,vv,0,0],[,v,0,0],[$To record interest on serial bonds.$],[,vv,0,0],[,v,0,0],[,$n$.,,]]$

$\backslash$table$[[$Account$,$Debit,Credit$],[v,0,0],[,0,0],[$To record parking fee revenues.$],[$v$,0,0],[,0,0],[$To record parking fees paid in advance.$],[vv,0,0],[,0,0],[$To record payment to the General Fund.$],[$v$,0,0],[v,0,0],[,0,0],[$v$,0,0],[$To record payment of operating expenses.$],[$v$,0,0],[v,0,0],[,0,0],[$v$,0,0],[$To record payment related to serial bond.$],[v,0,0],[,0,0],[$To record accrual of interest on serial bond$],[$v$,0,0],[vv,0,0],[$To record depreciation for the year.,,$]]$