. The following information pertains to activities for the construction of an of

Question

. The following information pertains to activities for the construction of an office building (the project hereafter) in capital project fund (CPF) of SB city during the fiscal year 2017 ending on 12/31/2017

GF issued $5,000,000 of 8% serial bond at 102 to finance the project on 1/1/2017. Interest of $400,000 is due on 12/31/2017 and decreasing amounts every12/31 for the next 9 years after that. The principal maturity of $500,000 is due on 12/31/2017.

Prepare any necessary journal entries for the above transactions for respective fund statements and government wide financial statements.

Explanation / Answer

ALL FIGURES ARE IN DOLLORS.

DATE TITLES AND EXPLANATIONS     DEBIT CREDIT JAN, 1 2017 CASH 5100000 FINANCING SOURCE- LONG TERM BONDS/DEBT 5100000 DEBT SERVICE FUND 100000 CASH 100000 (PREMIUM ON ABOVE BONDS TRANSFFERED TO DSF) DEC 31,2017 INTEREST ON BONDS 400000 PRINCIPAL PAYMENTS 500000 CASH 900000 DEC31,2017 DEBT SERVICE FUND 900000 INTEREST ON BONDS 400000 PRINCIPAL PAYMENT 500000

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