Net Asset Classifications. During the past year, Oak City had a number of transactions that impacted net asset classifications of its produce market, which is operated as an enterprise fund. All nominal accounts for the period have been closed to unrestricted net assets. For reporting purposes, the city’s finance director is trying to update the net asset categories to properly reflect current balances in each of the three net asset categories based on the following transaction information.
1. For the year, depreciation expense totaled $534,000.
2. During the year a piece of equipment with a carrying value of $2,610 was sold for its carrying value.
3. During the year $1,000,000 in deferred serial bonds was issued to construct a building to house the produce market. At the end of the year, construction work in progress for the building totaled $948,000. It is expected the building will be completed at the beginning of the next year.
4. To retire the $1,000,000 deferred serial bonds, $25,000 cash was placed in a sinking fund.
5. A $5,000 principal payment was made on a capital lease.
Required
To assist the finance director you have been asked to provide a journal entry for each of the above five items. Your journal entries should indicate the effect of each item on the net asset categories—invested in capital assets, net of related debt; restricted: and unrestricted.