A contract with a 6 percent retainage clause was signed with Arab Construction Company to construct a new city hall for $4,000,000. The entry to record this transaction will be:

a. Debit, Expenditures-Construction Cost $4,000,000; Credit, Retinage Payable $240,000, Voucher Payable $3,760,000.

b. Debit, Expenditures-Construction Cost $3,760,000; Credit, Voucher Payable $3,760,000.

c. Debit, Encumbrances $4,000,000; Credit, Budgetary Fund Reserved for Encumbrances $4,000,000.

d. Debit, Encumbrances $3,760,000; Credit, Budgetary Fund Reserved for Encumbrances $3,760,000.

Answer rating: 100% (QA)

Answer Correct Option a Debit ExpendituresConstruction Cost 4000000 Credit Retinage ... View the full answer