strayer.acc410.2011.wk5.sln

strayer.acc410.2011.wk5.sln - Accounting 410 Solution to...

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Unformatted text preview: Accounting 410 Solution to Week 5 Homework 6-3 (7 points) (Each JE in Part 1 is worth 1.0 point) 1. Journal entries (a) Cash $6,005,000 Bond issue costs 115,000 Other financing sourcesbond proceeds (face value) $6,000,000 Other financing sourcesbond premium 120,000 To record issuance of bonds (b) Other financing usesNonreciprocal transfer-out to debt service fund $5,000 Cash $5,000 To record the transfer of the bond premium, net of issue costs, to the debt service fund (c) Cash $3,027,000 State grant (revenue) $2,500,000 Other financing sourcesNonreciprocal transfer-in from general fund 527,000 To record the state grant and the nonreciprocal transfer-in from the general fund (d) Encumbrances $8,890,000 Reserve for encumbrances $8,890,000 To record the construction contract (e) Construction expenditures $8,890,000 Cash $8,890,000 To record payment to the contractor Reserve for encumbrances $8,890,000 Encumbrances $8,890,000 To cancel the encumbrance 1 (f) Other financing usesNonreciprocal transfer-out to debt service fund $ 137,000 Cash $ 137,000 To record the transfer of remaining cash to the debt service fund 2. Closing entries (0 points). You did not have to do the closing entries. Fund balance $9,147,000 Construction expenditures $8,890,000 Bond issue costs 115,000 Nonreciprocal transfer-out to debt service fund 142,000 To close expenditures and transfers-out State grant $2,500,000 Nonreciprocal transfer-in from general fund 527,000 Other financing sourcesbond proceeds (face value) 6,000,000 Other financing sourcesbond premium 120,000 Fund balance $9,147,000 To close revenues, transfers-in, and bond proceeds 6-5 (4 points) (Each JE in Part 1 is worth 0.60 point) 1. Debt service fund (a) Cash $1,000,000 Other financing sourcesnonreciprocal transfer-in from the capital projects fund $1,000,000 To record the transfer from the capital projects fund to establish the required reserve Investment in bonds $977,254 Cash $977,254 To record purchase of bonds as an investment (b) Cash $30,000 Investment in bonds 294 Interest revenue $30,294 To record revenue equal to the first periods interest and change in carrying value (3.1 percent of $977,254) 2 (c) Cash $3,470,000 Other financing sourcesnonreciprocal transfer-in from the general fundinterest $2,970,000 Other financing sourcesnonreciprocal transfer-in from the general fundprincipal 500,000 To record the transfers from the general fund (d) Expenditureinterest $3,000,000 Cash $3,000,000 To record the first payment of interest (closing entry) (0 points). You did not have to do the closing entries. Interest revenue $30,294 Other financing sourcesnonreciprocal transfer-in from the capital projects fund 1,000,000 Other financing sourcesnonreciprocal transfer-in from the general fundinterest 2,970,000 Other financing sourcesnonreciprocal transfer-in from the general fundprincipal 500,000 Expenditureinterest $3,000,000 Fund balance 1,500,294 To close the accounts...
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This note was uploaded on 08/17/2011 for the course ACCT 410 taught by Professor Khalib during the Spring '11 term at Strayer.

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strayer.acc410.2011.wk5.sln - Accounting 410 Solution to...

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