Question 1. Prepare journal entries in all Funds journals and/or Activity journal for the related transactions provided. There are 2 parts to it. You are required to answer both parts separately.

Part a.

1. A capital projects fund issued $5,000,000, 4 percent bonds for $5,050,000 to finance improvements of a park. Premiums received are to be used to service the debt issue.

2. The Parks and Recreation Special Revenue Fund transferred $250,000 for use in construction.

3. A construction contract was awarded in the amount of $5,200,000.

4. A bill was received from the contractor for $2,600,000.

5. The contractors bill is paid. 5% retainage is withheld.

6. The park renovations were completed and the final bill of $2,600,000 was received. The contractors bill and retainages are approved for payment in full. Total construction expenditures were allocated as follows: $5,000,000 to building, and the remainder to equipment.

7. The capital projects fund temporary accounts were closed, and the capital projects fund was closed by transferring remaining funds to the debt service fund for use in debt repayment.

Part b.

The following transactions occurred for the City of Fontaines General Fund.

1. The budget prepared for the fiscal year included Total estimated revenues of $2,774,000 and appropriations of $2,693,000.

2. Encumbrances issued against the appropriations during the year were $931,000.

3. The current years tax levy of $2,005,000 was recorded; uncollectibles were estimated as $65,000.

4. Collections of delinquent taxes from prior years levies totaled $132,000; collections of the current years levy totaled $1,459,000.

5. Invoices were received and approved for payment for items ordered in documents recorded as encumbrances in Transaction (2) of this problem. The estimated liability was $851,200. Actual costs were $850,500.

6. Revenue other than taxes collected during the year consisted of licenses and permits, $373,000; intergovernmental revenue, $400,000; and $66,000 of miscellaneous revenues.

7. Payments on Vouchers Payable totaled $1,505,000.