In 2018, the town of Bayview authorized the construction of two concrete roadways. The public works department estimates the project cost at $400,000, $20,000 of which is transferred from the general fund to the capital projects fund. The balance will be paid for through a special assessments levy on benefiting property owners. On January 1, 2018, $380,000, 4-year, 10% special assessment bonds are issued at face value to finance the property owners’ portion. Payments of $47,500 plus interest are made each June 30 and December 31. The bonds were issued. The town guarantees payment of the debt.
Purchase orders totaling $80,000 are issued, and a contract is signed for the estimated $320,000 additional cost of the project. The purchase order was approved by a town official.
The contract was approved by formal action of the town council, which is the highest level of authority within the town. Invoices for all purchase orders total $74,000. The actual contract cost is $375,000. Liabilities for these amounts are entered. Except for $30,000 withheld on the contract until final approval, all liabilities related to the completed construction are paid. Bay-view does not use budgetary accounts for these projects. Prepare entries in the capital projects fund for these events.