Journal entries for 1 - 21

The General Fund made a permanent contribution of $2,000,000 for working capital to start a municipal airport. The city used part of that money, together with the proceeds from a $25,000,000 revenue bond issue, to purchase an airport from a private company. The fair values of the assets and liabilities were as follows: The city purchased the airport for the fair market value of its net assets. Airlines were billed $3, 600,000 for rental rights to use ticket counters and landing and maintenance space. Of this amount, $3.890.000 is expected to be collectible. Supplies totaling $4, 500 were purchased on credit. Collections from airlines totaled $3, 850,000. Salaries of $200,000 were paid to airport personnel employed by the city. Utility bills totaling $100,000 were paid. A notice was received from the Last District Bankruptcy Court. Air Chance was declared bankrupt. The airport collected only $1,000 on its bill of $3,000. The airport obtained $3,000,000 of additional permanent contributions from the General Fund to help finance improvements at the airport. Interest of $1, 825,000 was paid to the bondholders. Supplies used during the year totaled $3, 600. The General Fund made an advance to the airport of $1, 500,000. Airport management plans to repay the advance in full in 2016. A contract was signed with The Construction Company for the new facilities for a total price of $5,000,000. The Municipal Airport Fund invested $2,000,000 in CDs. The Municipal Airport Fund received $315,000 upon redeeming $300,000 of the CDs mentioned in transaction 13. The airport purchased additional equipment for $300,000 cash. Interest expense of $350,000 was accrued at the end of the year. Other accrued expenses totaled $55,000. Depreciation was recorded as follows: $12, 500 of accounts payable was paid. $150,000 of interest revenue was received. Excess cash of $4, 500,000 was invested in CDs