Question

16.   Hills County operates on a Dec. 31 fiscal year.       This year the city council adopted a resolution to create a CPF to build a new library.

Required: Prepare the journal entries required in the Capital Projects Fund for the above transactions.

On 9/1/09 Birmingham County sold bonds at par value in the amount of $10,000,000 to finance construction of a new library.

On 10/10/09 Hills County entered into a contract with a private contractor to build a new library building in the amount of $10,000,000.

On 12/1/09, when the contract was half finished, the contractor submitted a bill for $5,000,000.

The bill was paid on 12/15/09 less Hills' standard 5% retention to assure any construction deficiencies are corrected.

Answer 1