Question

The voters of Salt Lake City authorized the construction of a new north-south expressway for the total
cost of no more than $75 million. the voters also approved the issuance of $50 million of 5% general
obligation bonds. The balance of the necessary funds will come from the following resources: $15
million from a federal grant and $10 million from a state grant. (The federal grant is a REIMBURSEMENT
grant and the state grant is a RESTRICTED grant). The City controls expenditures in the capital projects
fund through project management and uses encumbrance accounting for control purposes. REQUIRED:
Assuming the City maintains its books and records in a manner to facilitate the preparation of Fund
financial statements, prepare journal entries (budgetary entries, encumbrance entries, etc.) in the
Capital Project Fund for the following transactions:

(a) The City recorded the budget for the project.
(b) The City issued $50 million of 5% general obligation bonds at 101.
(c) The City signed the contract with the construction company to complete the construction of the
expressway.
(d) The City received a notice from the State that the grant had been approved and the proceeds will be
forwarded to the City in the State's current fiscal year.
(e) the City received an invoice from the contractor for $10 million. The City pays the invoice.
(f) The City received the Federal reimbursement grant in full.

Answer 1