General Fund and Debt Service Funds, journal entry help

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Governmental Accounting. This is journal entries plus a 750 minimum word essay.

Your city has decided to build a new library. The projected cost is $2 million. A bond issue for $1.2 million has been authorized, and the remainder is supposed to come from a contribution of $800,000 from the general fund. The bonds sold for $1.3 million, a premium of $100,000. Create the required journal entries for the following transactions:

  • The budget for the library
  • The payment and receipt of funds from the general fund
  • The issuance of the bonds
    • Assume that the premium remained in the capital projects fund.
    • Identify all of the funds required for these entries.
    • Discuss how the bond premium could be disposed.

750 words: In general terms, compare and contrast how expenditures are controlled in the general fund and in debt service funds. Explain why differences would occur.