The second factor is to determine if the trust

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The second factor is to determine if the trust “principle is to be maintained or expended” (Copley, 2015). 5-4 The citizens of Spencer County approved the issuance of $2,000,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows: Trial Balance-December 31, 2015 Debits Credits Cash $900,000 Contract payable $550,000 Due from state government 200,000 Encumbrances 85,000 Expenditures-capital 1,850,000 Intergovernmental grant 400,000 OFS: premium on bonds 45,000 OFS: proceeds sale of bonds 2,000,000 Budgetary fund balance- reserve for encumbrances 85,000 Transfer out 45,000 $3,080,000 $3,080,000 a. Prepare any closing entries necessary at year-end Intergovernmental grant 400,000 OFS: premium on bonds 45,000 OFS: proceeds sale of bonds 2,000,000 Expenditures-capital 1,850,000 Other financing uses: Transfer out 45,000 Fund Balance 550,000 Budgetary fund balance- 85,000 Encumbrances 85,000 b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the courthouse annex capital project fund. Spencer County Statement of Revenues, Expenditures, and Changes in Fund Balances Government Funds For the Year Ended December 31, 2015 Courthouse Renovation Total Gov. Funds Revenues Intergovernmental grant $ 400,000 $400,000 Total revenues 400,000 400,000 Expenditures Expenditures-capital 1,850,000 1,850,000 Total expenditures 1,850,000 1,850,000

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