Problem:
Two property owners along Elm Street claimed a new sidewalk was constructed further from the street than where they had granted easements. A resurvey confirmed that the sidewalk was constructed in the wrong place, but the city did not believe that the property owners were entitled to damages. The property owners sued the city in court and were awarded a total of $9,000, which was recorded as a judgment liability during October 2014. The amount will be borne by the Street Improvement Fund; it will not be recoverable from the contractor.
Required:
Question: Record this transaction in both the Street Improvement Fund and governmental activities journals. You should debit Construction Expenditures in the Street Improvement Fund and Construction in Progress at the government-wide level.
Note: Please show the work not just the answer.