The nature of a transaction gives a clue as to the type of fund in which it should be recorded. Kendal County engaged in the following transactions. For each, prepare an appropriate journal entry and indicate the type of fund in which it would most likely be recorded: It levied and collected $1million in taxes and dedicated to the repayment of outstanding general obligation bonds. It billed sponsors of a charity bicycle ride $5,000 for providing police patrols during the ride. It recognized $60,000 of cash dividends on investments dedicated to the support of a county arts center. It recognized $70,000 of cash dividends on investments dedicated to scholarships for needy county residents. It incurred $6 million in construction costs to complete a new county jail. The new jail was funded entirely with the proceeds of long‐term bonds. It transferred $400,000 of unrestricted funds to an appropriate fund to be invested and eventually used to repay the principal on the long‐term jail bonds (entries in two funds required). It recognized depreciation of $100,000 on equipment in a vehicle repair center that services all county departments that have motor vehicles. It collected $30,000 in parking fees at the county‐owned garage. It issued $8 million in bonds to improve the city‐owned electric utility. It distributed $3 million in taxes collected on behalf of school districts located within the country.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The nature of a transaction gives a clue as to the type of fund in which it should be recorded.

Kendal County engaged in the following transactions. For each, prepare an appropriate journal entry and indicate the type of fund in which it would most likely be recorded:

It levied and collected $1million in taxes and dedicated to the repayment of outstanding general obligation bonds.
It billed sponsors of a charity bicycle ride $5,000 for providing police patrols during the ride.
It recognized $60,000 of cash dividends on investments dedicated to the support of a county arts center.
It recognized $70,000 of cash dividends on investments dedicated to scholarships for needy county residents.
It incurred $6 million in construction costs to complete a new county jail. The new jail was funded entirely with the proceeds of long‐term bonds.
It transferred $400,000 of unrestricted funds to an appropriate fund to be invested and eventually used to repay the principal on the long‐term jail bonds (entries in two funds required).
It recognized depreciation of $100,000 on equipment in a vehicle repair center that services all county departments that have motor vehicles.
It collected $30,000 in parking fees at the county‐owned garage.
It issued $8 million in bonds to improve the city‐owned electric utility.
It distributed $3 million in taxes collected on behalf of school districts located within the country.