The following information relates to the Town of Evanville for the fiscal years ending 9/30/15 and 9/30/16.
Phase I is to be funded with bonds of $10,000,000, a contribution of $1,000,000 from the General Fund, and a State grant of $3,000,000. A separate capital project fund will be used to account for each phase of the project. Upon completion of Phase I of the project, any funds remaining in the Capital Project Fund are to be transferred to the Debt Service Fund. Prepare journal entries for the following information in the general ledger accounts for the Capital projects fund. (You may ignore the entries that would also be required in the governmental activities general journal at the government-wide level.)
The following transactions occur during the fiscal years ending 9/30/15 and 9/30/16.
10/15/14 – General Fund transfers $1,000,000 to the newly established Capital Projects Fund.
3/1/15 – Architect fees of $500,000 associated with the project are paid from the Capital Projects Fund.
3/15/15 – The City issues 3%, 25-year serial bonds dated 3/1/15 in the face amount of $10,000,000 at 101. Interest is payable semi-annually on March 1 and September 1 and is calculated using the bankers’ convention. Equal annual principal payments are due each March 1 with the first principal payment due 3/1/16. According to the Bond Indenture, any premium and/or accrued interest on the bonds is to be deposited immediately into a debt service fund and is restricted for debt service. The Bond Indenture also requires the City to transfer any unspent bond proceeds at the end of the construction project to the Debt Service Fund to be used for future debt service requirements.
4/15/15 – City Council awards a $13,000,000 construction contract to the Fun Time Construction Company. A purchase order was issued for the full amount of the contract.
6/1/15 – The City pays the Electric Utility Fund $200,000 for wiring associated with the soccer and baseball fields.
7/15/15 – The City receives a check from the State Department of Revenue for $1,500,000 for the ¼ penny sales tax collected through 6/30/15.
7/31/15 – Fun Time Construction Company submits its first progress billing for $7,000,000. The City Engineer inspects the work performed to date and approves the pay request in full less 5% for retainage.
8/15/15 – The City pays Fun Time Construction Company the amount billed less the 5% amount retained.
9/1/15 – Amounts due the bondholders are paid.
9/15/15 – The City receives $3,000,000 from the State Recreation Development Assistance Program as a grant in aid of construction.
1/15/16 – The City receives a check from the State Department of Revenue for $1,200,000 for the ¼ penny sales tax collected through 12/31/15.
2/12/16 – Fun Time Construction Company submits a final bill for the project in the amount of $6,000,000. The City Engineer inspects the work performed and finds 10 feet of sidewalk needs to be replaced due to large cracks but still approves the pay request in full less 5% for retainage.
3/1/16 – Amounts due the bondholders are paid.
3/10/16 – City employees replace the 10 feet of damaged sidewalk at a labor and materials cost of $5,000 which is paid with funds in the Capital Projects Fund.
4/15/16 – All amounts due Fun Time Construction Company are paid.
6/1/16 – Phase I is complete and all costs incurred have been paid.
9/1/16 – Amounts due the bondholders are paid.