Open a general journal for the City Jail Annex Construction Fund. Record the following transactions and post to the general ledger. Control accounts are not necessary.
(1) On January 1, 2015, the total face amount of bonds bearing an interest rate of 8 percent was sold at a $200,000 premium. Principal amounts of $200,000 each will come due annually over a 20-year period commencing January 1, 2016. Interest payment dates are July 1 and January 1. The first interest payment will be July 1, 2015. The premium was transferred to the City Jail Debt Service Fund 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 in the amount of $116,000. This amount had not been encumbered.
(4) Architects were engaged at a fee of $250,000.
(5) Preliminary plans were approved, and the architects were paid 20 percent of the fee.
(6) The complete plans and specifications were received from the architects and approved. A liability in the amount of $150,000 to the architects was approved and paid.
Accounting is the term that is used to define the financial statements of the business organization. There are many kinds of financial statements such as trial balance, profit and loss statement, ledger and others.
Answer and Explanation:
Journal entries records the helps in maintaining the records of the transactions done by the business organization on daily basis. it helps in keeping a fair and visible records.
Following are some journal entries from the book of accounts of City Jail Annex Construction Fund.
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from Financial Accounting: Tutoring SolutionChapter 1 / Lesson 33