Question :
Capital Projects Fund Homework Problem
Accuracy matters.
Tiger Township entered into the subsequent transactions during 2005.
1. The township authorized a bond issue of $11 million for the structure of a pedestrian walkway as part of a downtown revitalization project. An additional $1 million of general revenues is to be used for the project. The authorization was recorded in the suitable fund.
2. One million dollars of common revenues were paid to the construction fund from the General Fund.
3. The bonds were issued at 101. The premium was transferred to the fund from which the debt is to be serviced.
4. The township entered into a contract with Cooper Construction Company for construction of the path at evaluated cost of $10,350,000.
5. An engineering design firm was paid $174,000 for propose work on the project.
6. A bill for $4,200,000 was received from Cooper Construction Company for work done on the walkway to date. All but a 5% retainage was paid.
7. The accounts were closed at year end.
8. The walkway project was completed in 2006. Cooper Construction billed the township the residual $6,150,000 due on the project. The township accepted the project and paid Cooper in full.
9. The unused resources of the construction fund were set aside for debt service on the bonds. Consequently, those resources were paid to the appropriate fund.
Purpose the journal entries needed in the Capital Projects Fund to account for the above transactions. Manage closing entries.