The Town of Arbuckle began 2014 with an unreserved balance of $14 million in its Street Repair Fund, which is a Capital Projects Fund.At the start of the year, the city council appropriated $10 million to reconstruct portions of the roadbed for two of its major roadsElm Street and Keller Avenue.Shortly after, the town signed contracts with two construction companies to perform the repairs for a total of $10 million.During 2014, the town received billing invoices from the construction companies as follows:

$5.3 million for the entire cost of repairs to Elm Street. This amount is $0.3 higher than expected due to design changes approved by the town.The town did not encumber the additional $0.3 million.

$3.5 million, representing a progress billing for repairs to Keller Avenue, which were not completed at the end of 2014.

At the beginning of 2015, the town re-appropriated the remaining $1.5 million for the Keller Avenue repairs.During 2015, the town received the following billing invoice:

$1.1 million, representing the final billing for the Keller Avenue repairs.The final cost was $0.4 million less than anticipated.

REQUIRED:

Prepare journal entries to record the events and transactions over the two-year period.Include entries to appropriate, re-appropriate, encumber, and re-encumber the required resources, to record the payment of the billing invoices, and to close the accounts at the end of each year.

Year 2014

Debit ________________________________Amount $____________

Credit ___________________________Amount $ _____________

Debit ________________________________Amount $____________

Credit ___________________________Amount $ _____________