Question: Mountain View s citizens authorized the construction of a new library

Mountain View’s citizens authorized the construction of a new library. As a result of this project, the city had the following transactions during 2018:
a. On January 3, 2018, a $600,000 serial bond issue having a stated interest rate of 8% was authorized for the acquisition of land and the construction of a library building. The bonds are to be redeemed in 10 equal annual installments beginning February 1, 2019.
b. On January 10, 2018, the city made a $50,000 down payment deposit on the purchase of land, which is to be the site of the library. The contracted price for the land is $150,000, which is $40,000 below what the city estimated it would have to spend to acquire a site.
c. On March 1, 2018, the city issued serial bonds having a $450,000 face value at 102. The bond indenture requires any premium to be set aside for servicing bond interest.
d. On March 10, 2018, the city paid the remaining amount on the land contract and took title to the land.
e. On March 17, 2018, the city signed a $400,000 construction contract, approved by a city official, with Rower Construction Company.
f. On July 10, 2018, the contractor was paid $200,000 based on work completed to date.
g. On September 1, 2018, a semiannual interest payment was made on the outstanding bonds.
h. On December 1, 2018, the city issued serial bonds having a $100,000 face value at par.
i. On December 2, 2018, the contractor completed the library and submitted a final billing of $210,000, which includes $10,000 of additional work authorized by the city in October 2018 but not recorded as an encumbrance. The $210,000 was paid to the contractor on December 12, 2018.
j. Through December 10, 2018, the city had invested excess cash (from the bond offering) in short-term certificates of deposit. The amount collected on these investments totaled $12,000.
1. Prepare the journal entries in all fund/account groups.
2. Prepare any appropriate year-end adjusting and closing entries for the capital projects fund and the general fixed assets account group.
3. Prepare a statement of revenues, expenditures, and changes in fund balance for 2018 for the capital projects fund.

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  • CreatedApril 13, 2015
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