West Whiteland Township uses the calendar year. It decides to extend sewer lines to a

recently developed subdivision. The township estimates the cost will be $$8\mathrm{.}0$ million. The

project is to be funded first with the issuance of $$5\mathrm{.}0$ million in special assessment bonds;

second with a $$2\mathrm{.}0$ million reimbursement grant from the state; and finally with a $$1\mathrm{.}0$

million pledge $($contribution$)$ from ABC Construction Company to cover any additional

expenses. The agreement with the state is that it will award the reimbursement grant to West

Whiteland Township only after $$5\mathrm{.}0$ million is spent. During $2023,$ West Whiteland

Township engages in the following transactions, all of which are recorded in the Capital

Projects Fund.

$1.$ The township issues $$5\mathrm{.}0$ million in bonds at a premium of $$\mathrm{.}40$ million and incurs $$\mathrm{.}18$

million in issue costs. The premium, net of issue costs, is transferred to a newly

established debt service fund.

$2.$ The township receives $$2\mathrm{.}0$ million in cash from the state for the reimbursement grant in

anticipation that the township will incur at least $$2\mathrm{.}0$ million in construction costs.

$3.$ The township pays $$5\mathrm{.}9$ million to invest in short$-$term $($less than one year$)$ securities$.$

$4.$ The township issues purchase orders and signs construction contracts for $$7\mathrm{.}9$ million.

$5.$ The township sells $$4\mathrm{.}0$ million of its investments for $$4\mathrm{.}4$ million.

$6.$ The township receives invoices totaling $$6\mathrm{.}2$ million. As permitted by its agreement with

its prime contractor, the township retains $$\mathrm{.}7$ million pending satisfactory completion of

the project. The township pays $$5\mathrm{.}5$ million.

$7.$ The township recognizes the revenue earned from the reimbursement grant.

$8.$ Anticipating that the project will be completed in the following year, ABC Construction

Company pledges to contribute $$1$ million to West Whiteland Township. The township

receives the contribution as follows:

$$ $$700,000$ in $2023$;

$$ $$100,000$ in January, $2024$;

$$ $$100,000$ in February, $2024$; and

$$ $$100,000$ in March, $2024.$

$9.$ By year$-$end, the investments still on hand decreased in value by $$\mathrm{.}25$ million.

Use T Accounts When Possible

Do

a$.$ Using good form, prepare journal entries to record the transactions in $2023.$

b$.$ Using good form, prepare the Statement of Revenues, Expenditures, and Changes in

Fund Balance for the year ending December $31,2023.$ Also, prepare the Balance Sheet

at December $31,2023.$ At December $31,2022,$ the township$$s Capital Projects Fund

had the following account balances in its General Ledger:

$$ Cash $--$ $ $4$ million

$$ Investments $--$ $ $3$ million

$$ Unreserved Fund Balance $--$ $ $7$ million

Answer rating: 100% (QA)

a Journal Entries for 2023 Transactions 1 Issuance of Bonds West Whiteland Township issues 50 million in bonds at a premium of 04 million and incurs 0... View the full answer