Project Four

Recording Entries for the Capital Projects and Debt Service Funds

Learning Objectives

In this project you will learn to record transactions following the modified accrual basis of accounting commonly used in the Capital Projects Fund and in the Debt Service Fund.

1)Investment from the Debt Service Fund

The following email was received from the Comptroller of the Town of Oakville (document #401):

2)Issued General Obligation Bonds for the Capital Projects Fund

The following email was received from the Comptroller of the Town of Oakville (document #402):

3)Payment to Contractors in Capital Projects Fund

The following email was received from the Comptroller of the Town of Oakville (document #403):

4)Investment of Bond Proceeds

Earlier in this project, marketable securities were purchased and interest was earned for the Debt Service Fund. Now we will record the investment related to transactions for the Capital Projects Fund. The following email was received from the Comptroller of the Town of Oakville (document #404):

5)Interest Payment on Bonds

The following email was received from the Comptroller of the Town of Oakville (document #405):

STEPS:

1)Record the journal entries from the transactions detailed in #1-5 in the Project 4 tab. Note: The bond issuance and bridge construction relate to the operations of the capital projects fund and the interest payment for debt relates to the operations of the debt service fund.

2)Post the journal entries into the GL tab.

Notes for Government-Wide StatementsPlease make a note of the following. These will be included in Project 9.

Bonds of $4,000,000 and the bond premium of $142,000 will have to be recorded in the government-wide statements. Amortization of $1,290 of the premium on the bonds that were issued during the year will have to be recorded.

$1,000,000 needs to be recorded as Construction-in Progress. An additional $350,000 of interest on the bonds in the Debt Service Fund needs to be accrued in the government-wide statements.