The voters of Salt Lake City authorized the construction of a new north-south expressway for a total cost of no more that $75 million. The voters also approved the issuance of $50 million of 5% general obligation bonds. The balance of the necessary funds will come from the following sources: $15 million from a federal grant and $10 million from a state grant. The City controls expenditures in capital project funds through project management. The City does not formally incorporate budgetary entries in the capital project fund but it does use encumbrance accounting for control purposes.
REQUIRED: Assuming the City maintains its books and records in a manner that facilitates the preparation of the fund financial statements, prepare journal entries, in the Capital Project Fund, for the following transactions.
(a) The City issued $50 million of 5% general obligation bonds at 101.
(b) The City transferred the premium to the appropriate fund.
(c) The City incurred bid-related expenditures of $1,000.
(d) The City signed a contract with the lowest competent bidder for $48 million.
(e) The city received notice from the State that the grant had been approved and the proceeds will be forwarded to the City in the State's current fiscal year.
(f) The City received the federal grant in full.
(g) The City received a progress billing from the contractor for $10 million. The City pays the billing.
The solution examines the capital projects fund for a construction project in Salt Lake City. The expert prepares a fund financial statement and journal entries for the project.