structions:Prepare the journal entries for the capital projects fund and debt service fund. The capital projects fund records encumbrances.(Hint: Create two separate ledgers and clearly label them to keep the debt service journal entries separate from the capital project journal entries.) The Town of Balloons had the following transactions related to construction of a new library: 1/2/2020: A 20-year 4% general obligation bond with a face value of $6,000,000 was issued with a premium of $60,000. 1/2/2020: The premium was transferred to the debt service fund. 3/1/2020: A contract for construction was signed in the amount of $5,400,000 6/15/2020: Cash of $210,000 was transferred from the general fund to the debt service fund 7/1/2020: Interest of $120,000 and principal of $150,000 are paid on the library bonds. 12/1/2020: Received an invoice for construction completed to date in the amount of $4,700,000 12/15/2020: Paid the construction invoice, less 5% retention to assure any construction deficiencies are corrected.
Instructions:Prepare the
The Town of Balloons had the following transactions related to construction of a new library:
1/2/2020: A 20-year 4% general obligation bond with a face value of $6,000,000 was issued with a premium of $60,000.
1/2/2020: The premium was transferred to the debt service fund.
3/1/2020: A contract for construction was signed in the amount of $5,400,000
6/15/2020: Cash of $210,000 was transferred from the general fund to the debt service fund
7/1/2020: Interest of $120,000 and principal of $150,000 are paid on the library bonds.
12/1/2020: Received an invoice for construction completed to date in the amount of $4,700,000
12/15/2020: Paid the construction invoice, less 5% retention to assure any construction deficiencies are corrected.
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