The City of Lincoln is preparing its Government-Wide financial statements from its Fund financial statements. The City maintains a landfill for solid waste disposal and estimates that its total capacity is 23 million tons. At the end of the prior year, the City estimated that it had used 4 million tons and reported a liability for closure and postclosure costs of $4.8 million. During the year, the City estimates that it used an additional 600,000 tons of capacity. Closure and postclosure costs are expected to be $28 million when the Landfill reaches capacity.

Required:

a. What journal entries must the City include in its Government-Wide financial statement spreadsheet relating to the Landfill Liability at the beginning of the year and as of the end of the year?

b. Why must this entry be included in the spreadsheet?