Answer:
1. To Record the cash received on issue of bonds.
Date Account Titles and Explanation Debit Credit
Cash $25,000,000
Other financing uses-Bond proceeds $25,000,000
(To record the cash received on the issue of Bond)
2. To Record the inception of the construction contract.
Date Account Titles and Explanation Debit Credit
Encumbrances $22,000,000
Encumbrances outstanding $22,000,000
(To Record the inception of the construction contract)
3. To Record the encumbrances outstanding on account of the construction contract.
Date Account Titles and Explanation Debit Credit
Encumbrances outstanding $12,000,000
Encumbrances $12,000,000
(To Record the encumbrances outstanding on account)
Date Account Titles and Explanation Debit Credit
Construction Expenditure $12,000,000
Construction payable $12,000,000
(To Record the encumbrances outstanding on account)
4. To Record the transfer of the balance in the fund balance account.
Date Account Titles and Explanation Debit Credit
Other Financing sources - $25,000,000
Proceed of Bonds
Fund balance - Restricted $13,000,000
Construction Expenditure $12,000,000
(To record the construction expenses paid)
