The voters of the City of Monroe approved the issuance oftax-supported bonds in the face amount of $4,000,000 for theconstruction and equipping of a new City Jail. Architects were tobe retained, and construction was to be completed by outsidecontractors. In addition to the bond proceeds, a $1,340,000 grantwas expected from the state government.

Required:

a.

Open a general journal for the City Jail Annex ConstructionFund. Record the following transactions and post to the generalledger. Control accounts are not necessary.

(1) On January 1, 2017, the total face amount of bonds bearingan interest rate of 8 percent was sold at a $200,000 premium.Principal amounts of $200,000 each will come due annually over a20-year period commencing January 1, 2018. Interest payment datesare July 1 and January 1. The first interest payment will be July1, 2017. The premium was transferred to the City Jail Debt ServiceFund for the future payment of principal on the bonds.

(2) The receivable from the state government was recorded.

(3) Legal and engineering fees early in the project were paid inthe amount of $121,000. This amount had not been encumbered.

(4) Architects were engaged at a fee of $250,000.

(5) Preliminary plans were approved, and the architects werepaid $50,000 (20 percent of the fee).

(6) The complete plans and specifications were received from thearchitects and approved. A liability in the amount of $150,000 tothe architects was approved and paid.

(7) Bids were received and opened in public session. Afterconsiderable discussion in City Council, the low bid from HardhatConstruction Company in the amount of $4,500,000 was accepted, anda contract was signed.

(8) The contractor required partial payment of $1,350,000.Payment was approved and vouchered with the exception of a 5percent retainage.

(9) Cash in the full amount of the grant was received from thestate government.

(10) Furniture and equipment for the annex were ordered at atotal cost of $459,500.

(11) Payment was made to the contractor for the amount payable(see 8 above).

(12) The contractor completed construction and requested paymentof the balance due on the contract. After inspection of the work,the amount, including the past retainage, was approved for paymentand then paid.

(13)The furniture and equipment were received at a total actualinstalled cost of $459,300. Invoices were approved for payment.

(14) The remainder of the architects’ fees was approved forpayment.

(15) The City Jail Construction Fund paid all outstandingaccounts payables ($509,300) on December 31, 2017.

(16) The remaining cash was transferred to the City Jail DebtService Fund.

b.

Post the entries to the City Jail Construction Fund generalledger.

c.

Prepare and post an entry closing all nominal accounts to FundBalance.