Marion County decided to build a new addition to the county office building, and needed to sell bonds to finance the project. They will set up separate funds to build the addition as well as to service the debt. Please record the necessary journal entries for each transaction in all applicable journals as shown.

Be sure to indicate "no entry necessary" if a journal is listed but an entry is not required. Assume any necessary budgets have already been recorded.

a. $1,000,000 of 4%, 20 year serial bonds were sold at par on October 1st, 2019. Interest will be paid semiannually on April 1st and October 1st. Principal payments will be made each October 1st in addition to interest.
CPF

GW

b. A transfer from the general fund of $20,000 was made to the fund for April 1st, 2020 interest payment. 2020 interest payment.
GF

DSF

c. The $20,000 bond interest payment was made April 1, 2020.
DSF

GW

d. A contract was made with Mitchell, Inc. to build the addition. The total amount of the contract signed was $925,000 of the contract signed was $925,000.
CPF

GW

e. Various construction-related fees and expenses were paid in the amount of $50,000 for the building.
$50,000 for the building
CPF

GW

f. The contractor sent his bill, and the final cost was $930,000 and it was vouchered for payment.
for payment.
CPF

GW

g. A transfer from the general fund of $70,000 was made to the fund for October 1st, 2014 interest & principal payment.
2020 interest & principal paymentpayment
GF

DSF

h. The $20,000 bond interest and $50,000 bond principal payment was made October 1, 2014.
October 1,2020
DSF

GW

i. The building was completed and depreciation of $25,000 was recorded.
CPF

GW

GW

j. Contractor was paid less a 5% retained percentage.
CPF&GW

k. Accrue the bond interest at December 31, 2020.
CPF

GWGW

l. Contractor was paid balance owed after final inspections.
CPF&GW

m. Remainder of Cash in Capital Projects Fund was transferred to Debt Service Fund for debt repayment. (Hint: carefully analyze your entries, look for all cash. Cash transactions from the Capital Projects Fund to compute the amount of cash remaining to transfer to DSF).
CPF

DSF

Answer rating: 100% (QA)

a CPF Debit Cash 1000000 Credit Bonds Payable 1000000 GW Debit Bonds Payable 1000000 Credit Cash 1000000 b GF Debit Cash 20000 Credit Interest Payable 20000 DSF Debit Interest Payable 20000 Credit Cas... View the full answer