Question

Prepare Governmental Activities Journal:

Riverside began work on an outdoor amphitheater and concession stand at the city's park. It is to be financed by a $3,500,000 bond issue and supplemented by a $500,000 General Fund transfer. The following transactions occurred in 2017:

1. The General Fund transferred $500,000 to the Park Building Capital Projects Fund.

2. A contract was signed with Restin Construction Company for the major part of the project on a bid of $2,700,000.

3. Preliminary planning and engineering costs of $69,000 were vouchered for the Great Pacific Engineering Company. (This cost had not been encumbered.)

4. A payable was recorded for an $18,500 billing from the Water and Sewer enterprise fund for the cost of extending water pipes to the new concession stand.

5. An invoice in the amount of $1,000,000 was received from Restin for progress to date on the project.

6. The $3,500,000 bonds were issued at par.

7. The amount billed by the contractor (see Transaction 5) less 5 percent retainage was paid.

8. Temporary investments were purchased at a cost of $1,800,000.

Answer 1

Answer-

Journal entries
Riverside Park Building Capital projects Fund
a)
Cash	$500,000
Other financing Sources - Inter fund transfers in		$500,000
b)
Encumbrances	$2,700,000
Encumbrances outstanding		$2,700,000
c)
Construction Expenditures	$69,000
Vouchers Payable		$69,000
d)
Construction Expenditures	$18,500
Due to other funds		$18,500
e)
Encumbrances outstanding	$1,000,000
Construction Expenditures	$1,000,000
Encumbrances		$1,000,000
Contracts payable		$1,000,000
f)
Cash	$3,500,000
Other financing sources - proceeds of bonds		$3,500,000
g)
Contracts payable	$1,000,000
Contracts payable- retained percentage($1,000,000 x5%)		$50,000
Cash		$950,000
h)
Investments	$1,800,000
Cash		$1,800,000
i)
Other financing Sources - Inter fund transfers in	$500,000
Other financing sources - proceeds of bonds	$3,500,000
Fund Balance - Restricted		$2,500,000
Fund Balance - Assigned (difference)		$412,500
Construction Expenditures(69,000+18,500+1,000,000)		$1,087,500