In: Accounting
The City of Little River had the following transactions related to the construction of a new courthouse:
Prepare the journal entries required in both the capital-projects fund and the debt-service fund using the template provided in this module.
Journal Entries | |||||
Heading | Date | Particulars | Account Type | Debit Amount ($) | Credit Amount ($) |
Answer of Point a. | January 2, 2017 | Bank Account A/c | Current Assets | 2,020,000.00 | |
To 6% General Obligation serial Bond A/c | Long term Liability | 2,000,000.00 | |||
To Premium on issue of Bond A/c | Capital Account | 20,000.00 | |||
Narration : | (Being Serial Bond has been issued @ permium of $ 1 and money has been received on Bank ) | ||||
January 2, 2017 | Premium on issue of Bond A/c | Capital Account | 20,000.00 | ||
To Debt Service Fund A/c | Capital Account | 20,000.00 | |||
Narration : | (Being Premium amount has been transferred to Debt Service Account) | ||||
Answer of Point b. | March 1, 2017 | Land A/c | Fixed Assets | 200,000.00 | |
To Bank Account A/c | Current Assets | 20,000.00 | |||
Narration : | (Being Land for new park had been purchased) | ||||
Answer of Point c. | For point C "A contract has been signed for landscaping and Construction of various Structure in the park in the amount of $ 1,800,000" -for this no journal entries require to pass because here obligation are taken by both the parties to perform some work, no transaction has been recorded due to which there is a no need to pass the journal entries. | ||||
Answer of Point d. | June 15, 2017 | Bank Account A/c | Current Assets | 110,000.00 | |
To General Fund account A/c | Assets Account | 110,000.00 | |||
Narration : | (Being Fund receive from General Fund for payment of due amount on Bond) | ||||
Answer of Point e. | June 30, 2017 | Interest A/c | Expense Account | 60,000.00 | |
To Interest Payable A/c | Current Liabilities | 60,000.00 | |||
Narration : | (Being Interest has been Accrued on 6% General Obligation Bond) | ||||
July 1, 2017 | Interest Payable A/c | Current Liabilities | 60,000.00 | ||
6% General Obligation serial Bond A/c | Long term Liability Account | 50,000.00 | |||
To Bank A/c | Current Assets | 110,000.00 | |||
Narration : | (Being Interest due on 1st July and repayment of 500 nos bond has been made from bank) | ||||
Answer of Point f. | December 1, 2017 | Fixed Assets A/c | Fixed Assets | 385,000.00 | |
To Sundry Payable | Current Liabilities | 385,000.00 | |||
Narration : | (Being invoice has been receive and booked for progress of construction of Various Structure) | ||||
Answer of Point g. | December 27, 2017 | Bank Account A/c | Current Assets | 58,500.00 | |
To General Fund account A/c | Assets Account | 58,500.00 | |||
Narration : | (Being Fund receive from General Fund for payment of Interest on Bond) | ||||
Answer of Point h. | December 31, 2017 | Interest A/c | Expense Account | 58,500.00 | |
To Interest Payable A/c | Current Liabilities | 58,500.00 | |||
Narration : | (Being Interest has been Accrued on 6% General Obligation Bond) | ||||