5. Part 1. Capital Projects Fund Transactions The voters of theCity of Hillview approved the issuance of tax-supported bonds inthe face amount of $4,000,000 for the construction and equipping ofa new City Jail. Architects were to be retained, and constructionwas to be completed by outside contractors. In addition to the bondproceeds, a $1,320,000 grant was expected from the stategovernment. Required: a. Open a general journal for the City JailAnnex Construction Fund. Record the following transactions and postto the general ledger. Control accounts are not necessary. (1) OnJanuary 1, 2015, the total face amount of bonds bearing an interestrate of 8 percent was sold at a $200,000 premium. Principal amountsof $200,000 each will come due annually over a 20-year periodcommencing January 1, 2016. Interest payment dates are July 1 andJanuary 1. The first interest payment will be July 1, 2015. Thepremium was transferred to the City Jail Debt Service Fund for thefuture payment of principal on the bonds. (2) The receivable fromthe state government was recorded. (3) Legal and engineering feesearly in the project were paid in the amount of $116,000. Thisamount had not been encumbered. (4) Architects were engaged at afee of $250,000. (5) Preliminary plans were approved, and thearchitects were paid 20 percent of the fee. (6) The complete plansand specifications were received from the architects and approved.A liability in the amount of $150,000 to the architects wasapproved and paid. (7) Bids were received and opened in publicsession. After considerable discussion in City Council, the low bidfrom Hardhat Construction Company in the amount of $4,500,000 wasaccepted, and a contract was signed. (8) The contractor requiredpartial payment of $1,350,000. Payment was approved and voucheredwith the exception of a 5 percent retainage. (9) Cash in the fullamount of the grant was received from the state government. (10)Furniture and equipment for the annex were ordered at a total costof $439,500. (11) Payment was made to the contractor for the amountpayable (see 8 above). (12) The contractor completed constructionand requested payment of the balance due on the contract. Afterinspection of the work, the amount, including the past retainage,was approved for payment and then paid. (13)The furniture andequipment were received at a total actual installed cost of$439,300. Invoices were approved for payment. (14) The remainder ofthe architectsâ fees was approved for payment. (15) The City JailConstruction Fund paid all outstanding accounts payables ($489,300) on December 31, 2015. (16) The remaining cash wastransferred to the City Jail Debt Service Fund. b. Prepare and postan entry closing all nominal accounts to Fund Balance.
5. Part 1. Capital Projects Fund Transactions The voters of theCity of Hillview approved the issuance of tax-supported bonds inthe face amount of $4,000,000 for the construction and equipping ofa new City Jail. Architects were to be retained, and constructionwas to be completed by outside contractors. In addition to the bondproceeds, a $1,320,000 grant was expected from the stategovernment. Required: a. Open a general journal for the City JailAnnex Construction Fund. Record the following transactions and postto the general ledger. Control accounts are not necessary. (1) OnJanuary 1, 2015, the total face amount of bonds bearing an interestrate of 8 percent was sold at a $200,000 premium. Principal amountsof $200,000 each will come due annually over a 20-year periodcommencing January 1, 2016. Interest payment dates are July 1 andJanuary 1. The first interest payment will be July 1, 2015. Thepremium was transferred to the City Jail Debt Service Fund for thefuture payment of principal on the bonds. (2) The receivable fromthe state government was recorded. (3) Legal and engineering feesearly in the project were paid in the amount of $116,000. Thisamount had not been encumbered. (4) Architects were engaged at afee of $250,000. (5) Preliminary plans were approved, and thearchitects were paid 20 percent of the fee. (6) The complete plansand specifications were received from the architects and approved.A liability in the amount of $150,000 to the architects wasapproved and paid. (7) Bids were received and opened in publicsession. After considerable discussion in City Council, the low bidfrom Hardhat Construction Company in the amount of $4,500,000 wasaccepted, and a contract was signed. (8) The contractor requiredpartial payment of $1,350,000. Payment was approved and voucheredwith the exception of a 5 percent retainage. (9) Cash in the fullamount of the grant was received from the state government. (10)Furniture and equipment for the annex were ordered at a total costof $439,500. (11) Payment was made to the contractor for the amountpayable (see 8 above). (12) The contractor completed constructionand requested payment of the balance due on the contract. Afterinspection of the work, the amount, including the past retainage,was approved for payment and then paid. (13)The furniture andequipment were received at a total actual installed cost of$439,300. Invoices were approved for payment. (14) The remainder ofthe architectsâ fees was approved for payment. (15) The City JailConstruction Fund paid all outstanding accounts payables ($489,300) on December 31, 2015. (16) The remaining cash wastransferred to the City Jail Debt Service Fund. b. Prepare and postan entry closing all nominal accounts to Fund Balance.
