Q&A Hero

Question

Journalize the following municipal zoo transactions in the Lackluster County Enterprise Fund:

1. The zoo issued $1,000,000 of 5% revenue bonds at 99 on July 1, 2011 (an interest payment date). The bond proceeds are to be used for a new polar bear exhibit and the issue will mature in 20 years. Interest is paid on January 1 and July 1.

2. Depreciation for the year-ended December 31, 2011 included $175,000 for buildings and $105,000 for outdoor exhibit areas.

3. The zoo paid $800,000 in construction costs for the new exhibit. The exhibit is still under construction.

4. Interest on the revenue bonds was accrued at year-end, December 31, 2011. Straight-line amortization is used for bond discounts and premiums.