Question

Assume that Stafford Township decided to construct a bridge in2018 that is expected to cost $3,000,000. The bridge constructionand related costs are to be financed as follows;

FederalGrant $1,200,000

Bond IssueProceeds 1,500,000

Transfer from the General Fund 300,000

$3,000,000

The Federal Grant is for 40% of the qualifying projectexpenditures with a maximum grant limit of $1,200,000. It is anexpenditure driven grant. Any excess unearnedgrant cash received will be refunded to the federal government atthe completion of the project. Stafford Township appliesencumbrances to control expenditures.

The bridge is to be constructed by Ace Construction Company. TheStafford Township government workforce will perform all earthmoving& landscaping work. The estimated cost of the bridge is asfollows:

Bridge Structure

Ace ConstructionCompany $2,400,000

Earthmoving & landscaping

StaffordTownship 600,000

3,000,000

Please fill in Jounral entry:

1	Budgetary Entry - Revenues
	Account		Debit		Credit
	Estimated Revenues - Federal Grant		1,200,000
	Estimated Other Financing Sources - Bond		1,500,000
	Estimated Other Financing Sources - Transfer		300,000
	Appropriations - Bridge Structure				3,000,000
2	Budgetary Entry - Expenditures
	Account		Debit		Credit
3	Ace Construction Company signs a contract andbegins work on the bridge
	Account		Debit		Credit
4	The General Fund transfers $300,000 to the CapitalProject Fund as seed money to start operations
	Account		Debit		Credit
5	Egg Harbor Township issues bonds at a premium at$1,500,000. Bond Issue Costs paid to the
	underwriter (Morgan Stanley) was $5,000
	Account		Debit		Credit
6	Egg Harbor Township transferred the Excess of theBond Premium over issue costs to the
	Debt Service Fund
	Account		Debit		Credit
7	Egg Harbor Township incurred Earthmoving Expensesof $400,000 in 2018
	Account		Debit		Credit
8	Egg Harbor Township paid actual EarthmovingExpenses of $400,000 in 2018
	Account		Debit		Credit
9	Egg Harbor Township paid Ace Construction Company$1,200,000 in 2018
	Account		Debit		Credit
10	Egg harbor Township sends a list of expendituresincurred in 2018 to the Federal Government
	for Reimbursement. The reimbursement was subject tothe qualifying expenditure percentage.
	Account		Debit		Credit
11	Egg Harbor Township invests $500,000 in a U.S.Treasury Note at 5% maturing 10 years
12	The U.S. Treasury Note's accrued interest andincrease in appreciated value at year's end is $12,500