Carlton City has operated a City Utility (Enterprise) Fund for a number of years. The fund accounts for the activities of the city-owned electric, water and sewer systems. During the current year, the city engaged in the following transactions related to the city utility Fund.

REQUIRED:

Prepare the appropriate journal entries. If none is required, write “No entry required.”

a) The city billed its customers $1 million for services provided during the year.

b) The city received $260,000 from a developer to connect new houses to the existing utility lines.
c) Depreciation on existing physical plant was $700,000.

d) Revenue bonds in the amount of $2 million were issued at par to finance new construction. The bond agreement requires that the city retain $200,000 of the bond proceeds for purposes of servicing the debt if revenues are not sufficient to do so