Question

The City of Little River had the following transactions related to the construction of a new courthouse:

1. January 2, 2017: 20-year, 6%, general-obligation serial bonds with a face value of $2,000,000 are issued at 101. Interest payments are made on January 1 and July 1 of each year. The premium was transferred into the debt-service fund. The general fund will fully fund each payment as it becomes due.
2. March 1, 2017: Land is purchased for a new park at a cost of $200,000.
3. March 1, 2017: A contract is signed for landscaping and construction of various structures in the park in the amount of $1,800,000.
4. June 15, 2017: $110,000 is transferred from the general fund for the July 1 payment due on the courthouse-fund serial bonds.
5. July 1, 2017: Interest ($60,000) and principal ($50,000) are paid on the courthouse-fund serial bonds.
6. December 1, 2017: The city receives an invoice for progress completed to date on the courthouse construction project in the amount of $385,000.
7. December 27, 2017: $58,500 is transferred from the general fund for the January 1, 2018 interest payment due on the courthouse-fund serial bonds.
8. Interest is accrued as of December 31, 2017, following the exception permitted by the GASB.

Required:

Prepare a statement of revenues, expenditures, and changes in fund balance for the capital-projects and debt-service funds using the template and trial balance provided in this module. Assume this is the first year for each fund (beginning fund balances are zero) and that the city has no other long-term debt than that described above. Use separate columns for the two funds.

Answer 1

	The City of Little River
	Capital projects and debt service funds
	Statement of revenues ,expenditures
	and changes in Fund Balance
	Yr ended Dec 31 2017
	Courthouse Capital Projects Fund	Courthouse Bonds Debt Service Fund
Revenue	$0	$0
Expenditures
Capital Outlay	$585,000
Debt Service
Interest		$118,500
Principal		$50,000
Total Expenditures	$585,000	$168,500
Excess (Deficiency )of Revenues Over Expenditures	($585,000)	($168,500)
Other Financing Sources (Uses):
Proceeds of Bonds	$2,020,000
Transfers in (out)	($20,000)	$188,500
Total Other Financing Sources	$2,000,000	$188,500
Net Change in Fund Balance	$1,415,000	$20,000
Fund balance Jan 1 2017	$0	$0
Fund balance Dec 31 2017	$1,415,000	$20,000