The City of Stockholm authorized construction of a $600,000 addition to the municipal building in September 2016. The addition will be financed by $200,000 from the general fund and a $400,000 serial bond issue to be sold in April 2017.
REQUIRED:
Prepare journal entries for the capital projects fund and any other fund involved to the extent of requiring journal entries to record the transactions described.
1. On October 1, 2016, the general fund transferred $200,000 to the capital projects fund.
2. On November 1, 2016, a contract for the addition was awarded to Crooked Construction for $580,000.
3. On April 15, 2017, the $400,000, 7 percent bonds were sold for $401,000, and the premium was transferred to the debt service fund.
4. On May 2, 2017, construction was completed, and Crooked Construction submitted a bill for $580,000.
5. On May 12, 2017, the bill to Crooked Construction was paid in full. The CPF was closed, and the remaining cash was transferred to the general fund.