Q. Please Write Journal Entries for all accounts and do closing entries in both City Hall Construction Fund and Governmental Wide Fund version.

Chapter 5 Recording Capital Asset and Capital Project Transaction

City Hall Annex Construction Fund and Governmental Activities at the Government-wide Level

During fiscal year 2013, the voters of the City of Bingham approved the issuance of 3 percent tax supported bonds in the face amount of $6,500,000 to construct and equip an annex to the City Hall. The bonds are to mature in blocks of $500,000 every six months over a 6.5-year period (13 semi-annual payments). Lend city to bond and get interest of 3%

Required

Record the following transactions in the general journals of the City Hall Annex Construction Fund and governmental activities at the government-wide level. Do not record entries at this time in any other affected funds; those entries will be made in later chapters of this cumulative problem that cover those funds. Use account titles listed under the drop-down [Account #-Account Description] menu. Select 2014 for each transaction in the [Year] menu of the [Journal] view. Enter the paragraph reference; i.e., 5-a-(1, 2, 3, etc.), corresponding to each transaction in the [Transaction Description] box. The following account titles should appear in the [Accounts] view:

Cash

Investments

Special Assessments ReceivableCurrent

Interest Receivable on Investments

Vouchers Payable

Judgments Payable

Contracts Payable

Contracts PayableRetained Percentage

Fund BalanceRestricted

Encumbrances Outstanding

Revenues

Other Financing SourcesProceeds of Bonds

Construction Expenditures

Interest Expenditures

Other Financing UsesInterfund Transfers Out

Encumbrances

[Para. 5-a-1] On the first day of the 2014 fiscal year (January 1, 2014), the bond issue was sold at 101. Cash in the face amount of the bonds, $6,500,000, was deposited in the City Hall Annex Construction Fund; the premium was deposited directly in the debt service fund, as required by state law (e.g., the premium is NOT deposited into the general or capital projects funds). Make the appropriate entries in the general journals of the Construction Fund and governmental activities at the government-wide level. Wait until instructed in Chapter 6 to make the corresponding entry in the debt service fund. (See Chapter 6, Para. 6-b-3.)

[Para. 5-a-2] The city invested $5,000,000 of the bond proceeds in 90-day notes.

Dr Investment 5mill

Cash 5mill

[Para. 5-a-3] The City Hall Annex Construction Fund purchased land for the annex for $400,000. This amount was paid in cash. In the governmental activities general journal at the government-wide level, this purchase should be debited to Land. Construction related expense -> construction expenditure account

[Para. 5-a-4] Preliminary plans for the design of the City Hall Annex were received from the architectural firm. The invoice amount of $425,000 is accrued in vouchers payable. This amount was not previously encumbered. Costs are capitalized in the governmental activities on the government-wide financial statements.

[Para. 5-a-5] Legal and other capitalizable costs of the bond issue were accrued in vouchers payable in the amount of $75,000.

(5-7video) [Para. 5-a-6] Advertisements soliciting construction bids were accrued at a cost of $5,000. Costs are capitalized in the governmental activities on the government-wide financial statements.

[Para. 5-a-7] Construction bids were opened and analyzed. A contract was signed with the firm that submitted the winning bid of $4,800,000. A provision of the contract permits the city to withhold 4 percent of payment pending final acceptance of the completed project.

[Para. 5-a-8] The 90-day notes matured, paying $50,000 in interest (see para. 5-a-2). The interest should be recorded as general revenue in the governmental activities journal.

[Para. 5-a-9] The contractor submitted a billing for $2,800,000. This amount was recorded as a contract payable (see para. 5-a-7).

[Para. 5-a-10] The contractors billing (see para. 5-a-9) was paid, less a 4 percent retained percentage.

[Para. 5-a-11] All pending vouchers related to the City Hall Annex Construction Fund were approved and paid.

[Para. 5-a-12] Furniture and equipment for the annex were ordered at an estimated total cost of $760,000.

[Para. 5-a-13] The contractor completed construction, submitted the final bill, and requested payment of the balance due. A liability was recorded in the amount of $2,000,000 (related to the contract signed in 5-a-7).

[Para. 5-a-14] After final inspection, a final payment was made to the contractor, including the amount retained in para. 5-a-10.

[Para. 5-a-15] Furniture and equipment were received (see para. 5-a-12) at a total cost of $750,000. Invoices were paid in cash. In the governmental activities general journal, you should debit Equipment.

[Para. 5-a-16] At December 31, 2014, the completed building was recorded in the governmental activities general journal. The remaining cash balance of $95,000 in the City Hall Annex Construction Fund was transferred to the debt service fund. (Note: Record the transfer out of cash in the City Hall Annex Construction Fund general journal. Do not record the transfer in the debt service fund until you are instructed to do so in Chapter 6, Para 6-b-11. This transaction involves two governmental funds.)

For the City Hall Annex Construction Fund only, prepare year-end closing entries for 2014 and post them to the funds general ledger. (Note: Be sure to click on the check mark for [Closing Entry] and that Closing Entry appears in the [Transaction Description] box for the accounts being closed.) Click [Post Entries] to post the closing entry. Closing entries will be made in the governmental activities general journal in Chapter 9 of this cumulative problem. Ignore those entries for now.

Review the pre-closing trial balance for the construction fund for reasonableness. There should be no cash or investments (all funds were spent or transferred out), no liabilities (they have all been paid), and no encumbrances (everything has been received).