Prepare journal entries

P6-47. (Journal entries and financial statements-Capital Projects Fund) The following transactions occurred during 2018: 1. The City of Watersville approved the construction of an enclosed concert arena for a total cost of $75,000,000 in order to attract professional events. On the same day, a contract with a 6 percent retainage clause was signed with V.P. Construction Company for the arena. The arena will be financed by a $75,000,000 general obligation bond issue. Investment revenue of $4,000,000 was also included in the budget. (Assume that the budget is recorded in the accounts and encumbrance accounting is used.) 2. Watersville received $76,000,000 from the sale of bonds, which included a premium of $1,000,000 over the $75,000,000 face value. The $1,000,000 premium was transferred immediately to the ap- propriate Debt Service Fund. 3. The city invested $74,900,000 in securities. 4. The contract signed with V.P. stipulated that the contract price included the architect fees. The architects were paid their fee of $25,000 by Watersville. (Assume that a vouchers payable account was not used.) 5. The contractor submitted a progress billing of $3,000,000; the billing (less a 6 percent retainage) was approved. 6. Investments that cost $3,000,000 were redeemed for $3,000,000 plus $50,000 interest. 7. V. P. was paid the amount due in transaction 5 less the retainage. 8. Income totaling $3,700,000 was received on the investments. 9. V. P. submitted another progress billing of $8,000,000. The billing, less the retainage, was approved 10. Investments originally costing $7,800,000 were redeemed to make the payment to V.P. Cash pro- ceeds of $8,100,000 were received. 11. The contractor was paid the amount due in transaction 9 less the retainage. 12. Interest income of $60,000 was accrued. 13. Interest income of $10,000 was received in cash. Use the preceding information to do the following: a. Prepare the journal entries necessary to record these transactions in the Capital Projects Fund. As- sume that the city operates on a calendar year. ...de af December 31 2018. before closing