esidents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to their historic town hall on November 15, 2022. Financing for the project consists of $2,500,000 from a 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the General Fund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales tax imposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capital projects fund, debt service fund, and governmental activities at the government-wide level. You may ignore entries in the General Fund. The town has a calendar year-end.
Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to their
historic town hall on November 15, 2022. Financing for the project consists of $2,500,000 from
a 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the General
Fund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales tax
imposed on every dollar of sales in the city.
Required:
Complete the necessary
projects fund, debt service fund, and governmental activities at the government-wide level. You
may ignore entries in the General Fund. The town has a calendar year-end.
a. Record the 2023 budget for the Serial Debt Service Fund. Sales taxes of $350,000 are
expected to be collected in 2023; the only appropriation is expected to be six months of
interest of the serial bond.
b. The town transfers $1,000,000 from the General Fund to a newly established capital
projects fund.
c. Planning and architect's fees for the town hall renovation are paid in the amount of
$200.000.
d. The town hall renovation construction contract is awarded to a local contractor, Central
Paving and Construction, for $4,500,000.
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