The citizens living on Carmelo Avenue agreed to a capital improvement special assessment to replace sidewalks on both sides of the avenue. The city will oversee the construction, issue special assessments debt to pay for it, and bill (assess) homeowners for their portion of the cost. The estimated cost of the project is $4.0 million. The city itself will be responsible for any defaults on the part of the homeowners. Because the city uses a separate capital projects fund for its projects, it does not integrate budgetary accounts. However, it does use encumbrance accounting. REQUIRED: Provide journal entries for the city's fund and discussion as follows: Be sure to indicate in which fund the entry should be recorded:

1. The city puts the project out for his and accepts the lowest competitive bid of $3.7 million.

2. The contractor does the work and bills the city for $3.9 million -- $0.2 million over the contracted amount. The city council approves the overage. The city lends resources from its general fund to pay the bill, pending issuance of special assessment debt.

3. The city issues $4.0 million in 10-year special assessment debt. The city receives $3.9 million, an amount that is net of debt issue costs of $0.1 million.

4. The capital projects fund repays the city's general fund.