Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 25

General obligation bonds, fixed asset construction. Prepare journal entries to record the following events. Identify every fund(s) or group of accounts in which an entry is made.
a. The city authorized the construction of a city hall to be financed by a $6,000,000 contribution of the general fund and the proceeds of a $30,000,000 general obligation serial bond issue. Both amounts are budgeted to be received in the current year. Expenditures during the current year are estimated to be $14,000,000. Budgetary accounts are used.
b. The general fund remits the $6,000,000.
c. The bonds are sold for 99; issue costs totaled $50,000.
d. A contract is signed with Mader Construction Company for construction of the city hall for an estimated contract cost of $32,000,000. The contract was authorized by a city official delegated authority by the city council.
e. By year-end, $7,000,000 is paid against the contract with Mader Construction Company.