During the year, the city council approved the construction of a new school building at an estimated cost of $2,750,000. They also authorized the issuance of $2,500,000 in general obligation long-term bonds to finance the cost of construction. Record journal entries for the following transactions for the fiscal year 2017 and post them to the general ledger for the School Building Capital Project Fund.

Entry Reference

1. $250,000 was received from the General Fund for the construction of a new school building (see entry GF9).
(GF9 The city government agreed to provide $250,000 for the school building construction project and $250,000 was transferred to the school building capital project fund.)

2. On April 1, 2017, as authorized by the city council, $2,500,000 in 10% general obligation long-term bonds were issued for $2,580,000. The premium of $80,000 was reserved for the redemption of the bonds and immediately transferred to the debt service fund. The principal was set aside for the construction of the school. The bonds call for annual interest payments on March 31, and mature on April 1, 2037.

3. On June 1, the school building contract was awarded to the lowest bidder for $2,600,000, including planning and architect’s fees.

4. On November 30, 2017, progress billings of $1,250,000 for the school building were received from the contractor and $850,000 was paid in cash on December 31, 2017. The remaining balance is expected to be paid in January 2017. Liabilities resulting from the capital additions are recorded in “Contracts Payable.”

Answer rating: 100% (QA)

250000 Bank Accoun t to chool Bulding Coapitl pogect re 250000 ne coiued fund pom cit Ghovermmemt ... View the full answer