The information below relates to the construction of a new recreation center in the city of Lander. Landers fiscal year ends on June 30.

Fiscal 2019 transactions

1. A bond issue in the amount of $10,000,000 was authorized to provide funds for the construction. The bonds are to be repaid, in 20 annual installments, from a debt service fund, with the first installment due on June 30, 2019. Interest at 4 percent of face value is to be paid yearly on June 30.

2. An advance of $800,000 was received from the general fund to make a deposit on the land contract of $1,200,000. The deposit was made.

3. On July 1, 2018, bonds having a face value of $10,000,000 were sold for cash at 102, for an effective interest rate of 3.8 percent.

4. Contracts amounting to $7,800,000 were awarded to the lowest bidder for the construction of the recreation center.

5. The temporary advance from the general fund was repaid, and the balance on the land contract was paid.

6. The architect certified that work in the amount of $6,400,000 was completed, and submitted bills for that amount. $200,000 is to be held as retainage.

7. Bills paid by the treasurer relative to the completed work amounted to $6,200,000.

8. The bond premium was transferred to the debt service fund.Fiscal 2020 transactions

9. Due to engineering modifications in the construction plans, the contract was revised to $8,800,000.

10. The recreation center was completed and billed at a further cost of $2,300,000. The building passed final inspection.

11. The treasurer paid all bills.

12. The cash balance remaining was transferred to the debt service fund.

Additional information:

1. Interest on the bond issue is paid directly from the general fund.

2. Budgeted and actual transfers from the general fund to the debt service fund are $450,000 in fiscal 2019 and $550,000 in fiscal 2020.

3. Cash accumulated in the debt service fund through transfers from the capital projects fund and the general fund was invested in certificates of deposit which yielded interest income of $5,000 in fiscal 2019 and $4,000 in fiscal 2020. Expected investment income on these investments was $5,000 in each year.

4. To meet the yearly bond principal payment, the debt service fund liquidated investments of $500,000 during each of the fiscal years 2019 and 2020. It paid installments on the bonds when due on June 30 of each year.

Assume recreation center capital projects fund resources are restricted. Debt service fund resources are committed

Required

a.Prepare the journal entries, including closing entries, for the recreation center capital projects fund

for fiscal years 2019 and 2020.

b.Prepare the balance sheet for the recreation center capital projects fund on June 30, 2019.

c.Prepare the journal entries, including closing entries, for the debt service fund for fiscal years 2019

and 2020

Required

a. Prepare the journal entries, including closing entries, for the recreation center capital projects fund for fiscal years 2019 and 2020.

b. Prepare the balance sheet for the recreation center capital projects fund on June 30, 2019.

c. Prepare the journal entries, including closing entries, for the debt service fund for fiscal years 2019 and 2020