Homework $18-3$

The following transactions represent practical situations frequently encountered in accounting for municipal governments

Each transaction is independent of the others. For each of the transactions described, prepare the necessary journal entries

for all funds involved with designation of funds.

The Green Acre City Council adopted general operating budget in which revenue is estimated at $$705,000$

and anticipated expenditures at $$650,000.$

Taxes of $$180,000$ are levied for the special revenue fund of Hiawatha. Two percent is estimated to be uncollectible.

On October $10,$ the general fund of Junction City repaid the utility fund a loan of $$3,000$ plus $$80$ interest.

The loan had been made in the previous year.

On February $1$ of the current year, the City of Northstate issued $4\%,10$ year, serial, general obligation bonds with a face value of $$400,000.$

Interest is payable annually on February $1.$ Total proceeds were $$408,000$

the premium was transferred to the debt service fund for ultimate payment of the principal.

The bond issue was floated to finance the construction of an addition to the city hall, estimated to cost $$400,000.$

A contract was signed for the construction for $$400,000,$ and on December $1$ of the current year,

the addition was completed at a cost of $$403,000,$ all of which was paid.

Cash of $$56,000$ was transferred from the general fund to pay for the current portion of principal and interest.

$($this relates to number $4.)$

$2$ Prepare the journal entries with the proper fund designated.