Geneva County authorized the issuance of bonds and contracted with the Chessie Construction Company (CCC) to build a new convention center. During 2013, 2014, and 2015, the county engaged in the transactions that follow. All were recorded in the county’s capital projects fund.
a. In 2013, the county issued $350 million in bonds (and recorded them as bond proceeds, an account comparable to revenues.)
b. The county approved the contract proposal from CCC for $350 million and encumbered the entire amount.
c. CCC billed the county for $115 for construction to date.
d. The county paid CCC the amount due in full.
e. In 2014, CCC billed the county for additional construction to date of $190 million.
f. The county paid the amount due in full.
g. In 2015, CCC completed construction of the convention center and billed the county an additional $50 million. The county approved the additional costs, even though the total cost of the center was now $355 million, $5 million more than the contract initially provided for.
h. The county transferred $5 million from its general fund to the capital projects fund.
i. The county paid the $50 million in full.
REQUIRED:
Prepare the journal entries to record these transactions in the capital projects fund, including closing entries. Assume that amounts originally encumbered are reappropriated each year. Hence the county need not re-establish encumbrances in each year after the first year. Instead, it can close the expenditures of the second and third years to reserve for encumbrances rather than to fund balance.