accrued interest.) For now you should not make the entries in the Street Improvement Bond Debt Service Fund to record the accrued interest and premium. Those entries will be made in Chapter 6 of this cumulative problem. 3. [Para. 5-a-3] On February 21, 2023, construction bids were opened and analyze A bid of $3,300,000 was accepted, and the contract was awarded for the Elm Street Project. The contract provided for a retained percentage of 5 percent from
accrued interest.) For now you should not make the entries in the Street Improvement Bond Debt Service Fund to record the accrued interest and premium. Those entries will be made in Chapter 6 of this cumulative problem. 3. [Para. 5-a-3] On February 21, 2023, construction bids were opened and analyze A bid of $3,300,000 was accepted, and the contract was awarded for the Elm Street Project. The contract provided for a retained percentage of 5 percent from
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please answer question 5 [Para. 5-a-5]. I included all supporting information.
![accrued interest.) For now you should not make the entries in the Street
Improvement Bond Debt Service Fund to record the accrued interest and
premium. Those entries will be made in Chapter 6 of this cumulative problem.
3. [Para. 5-a-3] On February 21, 2023, construction bids were opened and analyzed.
A bid of $3,300,000 was accepted, and the contract was awarded for the Elm
Street Project. The contract provided for a retained percentage of 5 percent from
each progress payment, and from the final payment, until final inspection and
acceptance by the city's public works inspectors.
Required: Record the signing of the contract in the Street Improvement Fund
general journal. This transaction has no effect at the government-wide level.
4. [Para. 5-a-4] Sales tax revenue of $83,000 was received.
Required: Record this transaction in both the Street Improvement Fund and
governmental activities general journals.
5. [Para. 5-a-5] Vouchers payable accumulated to date were paid on March 30,
2023.
Required: Record this transaction in both the Street Improvement Fund and
governmental activities general journals.
6. [Para. 5-a-6] July 6, 2023, the contractor for the Elm Street Project reported that
the project was about one-half completed and requested a progress payment of
$1,600,000. This amount was paid July 25, 2023, less the 5% retained percentage.
Required: Record these transactions in both the Street Improvement Fund and
governmental activities general journals.
7. [Para. 5-a-7] Additional sales taxes were collected in the amount of $278,000 on
December 1, 2023.
Required: Record this transaction in both the Street Improvement Fund and
governmental activities journals.
8. [Para. 5-a-8] On December 10, 2023 the Elm Street project was completed and
the contractor for the project requested a final payment of $1,650,000. This
amount was recorded as a liability. Payment was made, less the retained
percentage, on December 15, 2023.
Required: Record these transactions in both the Street Improvement Fund and
governmental activities journals. Because the project is completed, all
encumbrances for the project should be closed.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd046fed3-afa8-4b62-b61b-e027e2dbdbcb%2F45724a5d-64a1-4e58-a29d-1138b0960d8d%2Fssao4h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:accrued interest.) For now you should not make the entries in the Street
Improvement Bond Debt Service Fund to record the accrued interest and
premium. Those entries will be made in Chapter 6 of this cumulative problem.
3. [Para. 5-a-3] On February 21, 2023, construction bids were opened and analyzed.
A bid of $3,300,000 was accepted, and the contract was awarded for the Elm
Street Project. The contract provided for a retained percentage of 5 percent from
each progress payment, and from the final payment, until final inspection and
acceptance by the city's public works inspectors.
Required: Record the signing of the contract in the Street Improvement Fund
general journal. This transaction has no effect at the government-wide level.
4. [Para. 5-a-4] Sales tax revenue of $83,000 was received.
Required: Record this transaction in both the Street Improvement Fund and
governmental activities general journals.
5. [Para. 5-a-5] Vouchers payable accumulated to date were paid on March 30,
2023.
Required: Record this transaction in both the Street Improvement Fund and
governmental activities general journals.
6. [Para. 5-a-6] July 6, 2023, the contractor for the Elm Street Project reported that
the project was about one-half completed and requested a progress payment of
$1,600,000. This amount was paid July 25, 2023, less the 5% retained percentage.
Required: Record these transactions in both the Street Improvement Fund and
governmental activities general journals.
7. [Para. 5-a-7] Additional sales taxes were collected in the amount of $278,000 on
December 1, 2023.
Required: Record this transaction in both the Street Improvement Fund and
governmental activities journals.
8. [Para. 5-a-8] On December 10, 2023 the Elm Street project was completed and
the contractor for the project requested a final payment of $1,650,000. This
amount was recorded as a liability. Payment was made, less the retained
percentage, on December 15, 2023.
Required: Record these transactions in both the Street Improvement Fund and
governmental activities journals. Because the project is completed, all
encumbrances for the project should be closed.
![Chapter 5 Recording Capital Asset Transactions
Street Improvement Capital Projects Fund and Governmental Activities at the
Government-wide Level
During late 2022, the voters of the City of Smithville authorized tax-supported bond
issues totaling $9,000,000 as partial financing for projects to construct the extension of
two streets and the related curbs, culverts, and storm sewers in the city. The estimated
total cost of the projects, which are expected to extend over the next three years, was
$11,200,000. In addition to the bond financing, voters also approved a special 1 cent sales
tax to assist in financing the projects. The sales tax begins January 1, 2023 and will
continue for seven years. The sales tax is projected to generate $380,000 each year.
Required
a. Prepare general journal entries as necessary to record the transactions described
below in the Street Improvement Fund general journal and, if applicable, in the
governmental activities general journal. Do not record entries. this time in othe
affected funds; those entries will be made in the later chapters of this cumulative
problem that cover the affected funds. Use account titles listed under the drop down
[Account] menu. Be sure the year 2023 is selected from the drop-down [Year] menu
and the appropriate paragraph number shown in bold-face font below is in the [Add
description] box.
1. [Para. 5-a-1] In early 2023, design plans and specifications for the first project,
the Elm Street Project, were submitted by a construction engineering firm. The
firm billed the Street Improvement Fund for $110,000.
Required: Record this billing and the related Vouchers Payable liability in the
Street Improvement Fund and governmental activities journals. (Note: this
transaction was not encumbered.)
2. [Para. 5-a-2] On February 1, 2023, 2.5% deferred serial bonds with a face value
of $3,000,000 were sold for a total amount of $3,036,250, of which $6,250 was
for accrued interest from the January 1, 2023 date of the bonds and $30,000 was a
premium on the bonds sold. Cash in the amount of the accrued interest and
premium was deposited directly in the Street Improvement Bond Debt Service
Fund. Cash in the amount of $3,000,000 was deposited and recorded in the Street
Improvement Fund.
Required: Record these transactions in the Street Improvement Fund and
governmental activities journals. In addition to recording the liability for bonds
payable in the governmental activities journal, you should record the premium on
the bonds payable (credit Premium on Deferred Serial Bonds) and accrued
interest on bonds sold (we recommend that you credit Expenses-Interest on
Long-term Debt)in the governmental activities general journal for the $6,250 of](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd046fed3-afa8-4b62-b61b-e027e2dbdbcb%2F45724a5d-64a1-4e58-a29d-1138b0960d8d%2F5qto6og_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Chapter 5 Recording Capital Asset Transactions
Street Improvement Capital Projects Fund and Governmental Activities at the
Government-wide Level
During late 2022, the voters of the City of Smithville authorized tax-supported bond
issues totaling $9,000,000 as partial financing for projects to construct the extension of
two streets and the related curbs, culverts, and storm sewers in the city. The estimated
total cost of the projects, which are expected to extend over the next three years, was
$11,200,000. In addition to the bond financing, voters also approved a special 1 cent sales
tax to assist in financing the projects. The sales tax begins January 1, 2023 and will
continue for seven years. The sales tax is projected to generate $380,000 each year.
Required
a. Prepare general journal entries as necessary to record the transactions described
below in the Street Improvement Fund general journal and, if applicable, in the
governmental activities general journal. Do not record entries. this time in othe
affected funds; those entries will be made in the later chapters of this cumulative
problem that cover the affected funds. Use account titles listed under the drop down
[Account] menu. Be sure the year 2023 is selected from the drop-down [Year] menu
and the appropriate paragraph number shown in bold-face font below is in the [Add
description] box.
1. [Para. 5-a-1] In early 2023, design plans and specifications for the first project,
the Elm Street Project, were submitted by a construction engineering firm. The
firm billed the Street Improvement Fund for $110,000.
Required: Record this billing and the related Vouchers Payable liability in the
Street Improvement Fund and governmental activities journals. (Note: this
transaction was not encumbered.)
2. [Para. 5-a-2] On February 1, 2023, 2.5% deferred serial bonds with a face value
of $3,000,000 were sold for a total amount of $3,036,250, of which $6,250 was
for accrued interest from the January 1, 2023 date of the bonds and $30,000 was a
premium on the bonds sold. Cash in the amount of the accrued interest and
premium was deposited directly in the Street Improvement Bond Debt Service
Fund. Cash in the amount of $3,000,000 was deposited and recorded in the Street
Improvement Fund.
Required: Record these transactions in the Street Improvement Fund and
governmental activities journals. In addition to recording the liability for bonds
payable in the governmental activities journal, you should record the premium on
the bonds payable (credit Premium on Deferred Serial Bonds) and accrued
interest on bonds sold (we recommend that you credit Expenses-Interest on
Long-term Debt)in the governmental activities general journal for the $6,250 of
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