Q2:

(Preparation of government-wide financial statements - capital asset elements)

The following information is extracted from the City of Jeddah government-wide statement of net position at December 31, 2018:

Capital assets 3,000,000

Accumulated depreciation, capital assets 1,600,000

Annual depreciation rate on capital assets 10 %

Bonds payable -0-

The following information is extracted from the city's governmental funds statement of revenues, expenditures, and changes in fund balances for the year ended December 31, 2018.

Expenditures - bond principal (Debt Service Fund) 60,000

Proceeds of debt (Capital Projects Fund) 600,000

Required:

a. Prepare journal entries so the foregoing information can be used in a work sheet to prepare government-wide financial statements for the year ended December 31, 2018.