Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 2 has two parts, part 2a and part 2b. Answer each part separately using the same information. Do not mix answers to 2a and

Problem 2 has two parts, part 2a and part 2b. Answer each part separately using the same information. Do not mix answers to 2a and 2b; they are answered separately.

Problem 2a: Identify which of the following governmental funds should be used and write the journal entries needed for the listed transactions. You do not need to write any General fund entries for this problem.

Capital projects fund Debt service fund Special revenue fund

Permanent fund

Problem 2b: For the Governmental Activities section of the government-wide records: Write any necessary journal entries for the following listed transactions. Write no entry if no entry is needed.

1. Duration Township, covered in this problem, issues a $8,000,000 bond at face value. The cash is to be used for the construction of a fire station.

2. Previously undesignated cash of $100,000 from the General Fund is set aside to begin paying the bonds issued in item (1).

3. A state cash grant of $425,000 is received that must be spent in the future for updates to parks facilities. The grant proceeds are held until the updating work is started.

4. Cash of $200,000 is transferred from the General Fund for construction of the fire station.

5. Investments valued at $600,000 are received as a donation from a grateful citizen. Income from the investments is to be used for children's programs.

6. Salaries of $25,000 are paid to workers updating the facilities in Main Street Park according to the requirements of the grant received in item 3.

7. The fire station is completed and a check is sent to the primary contractor for $5,200,000. No commitment had previously been recorded for the contract.

8. Nothing has yet been recorded this year regarding scheduled payments on the general obligation bonds. A cash payment of $50,000 is made that consists of $45,000 of interest and $5,000 of principal. The interest had not been previously accrued.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Ethical Obligations And Decision Making In Accounting Text And Cases

Authors: Steven Mintz, Roselyn Morris

2nd Edition

0078025281, 9780078025280

More Books

Students also viewed these Accounting questions