The information below relates to the construction of a new recreation building in the City of Lander.

Question:

The information below relates to the construction of a new recreation building in the City of Lander. Lander's fiscal year ends on June 30.
Fiscal 2013 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 30,2013. Interest at 4 percent of 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, 2012, bonds having a 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 2014 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 2013 and $550,000 in fiscal 2014.
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 2013 and $4,000 in fiscal 2014. Expected investment income on these investments was $5, (XX) 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 2013 and 2014. It paid installments on the bonds when due on June 30 of each year.
Assume recreation 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 2013 and 2014.
b. Prepare the for the recreation center fund on June 30, 2013.
c. Prepare the journal entries, including closing entries, for the debt service fund for fiscal years 2013 and 2014. Balance Sheet
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