general obligation bonds fixed asset construction prepare journal entries to record 614445

General obligation bonds, fixed asset construction. Prepare journal entries to record the following events. Identify every fund(s) or group of accounts in which an entry is made.

a. The city authorized the construction of a city hall to be financed by a $400,000 contribution of the general fund and the proceeds of a $2,000,000 general obligation serial bond issue. Both amounts are budgeted to be received in the current year. Expenditures during the current year are estimated to be $850,000. Budgetary accounts are used.

b. The general fund remits the $400,000.

c. The bonds are sold for 101; the premium is transferred to the debt service fund. The premium is to be used for interest payments.

d. A contract is signed with Rollins Construction Company for the construction of the city hall for an estimated contract cost of $2,300,000.

e. By year-end, $1,000,000 is paid against the contract with Rollins Construction Company.