Problem: A special district's balance sheet may not capture its economic resources and obligations.
A special district accounts for its general fund (its only fund) on a modified accrual basis. In a particular period, it engaged in the following transactions:
It issued $20 million in long-term bonds.
It acquired several tracts of land at a total cost of $4 million, paying the entire amount in cash.
It sold a portion of the land for $1 million, receiving cash for the entire amount. The tract sold had cost $0.8 million.
It repaid $2 million of the bonds.
It lost a lawsuit and was ordered to pay $9 million over three years. It made its first cash payment of $3 million.
Required: Prepare journal entries to record the transactions in the general fund.