The City of Waterville applied for a grant from the state government to build a
ID: 2424277 • Letter: T
Question
The City of Waterville applied for a grant from the state government to build a pedestrian bridge over the river inside the city’s park. On May 1, 2017, the city was notified that it had been awarded a grant of up to $200,000 for the project. The state will provide reimbursement for allowable expenditures. On May 5 the special revenue fund entered into a short-term loan with the General Fund for $200,000 so it could start bridge construction. During FY2017 the special revenue fund expended $165,000 for allowable bridge construction costs, for which it submitted documentation to the state. Reimbursement was received from the state on December 13, 2017.
For the special revenue fund, provide the appropriate journal entries, if any, that would be made for the following. (Assume the city has a fiscal year end of December 31.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
The City of Waterville applied for a grant from the state government to build a pedestrian bridge over the river inside the city’s park. On May 1, 2017, the city was notified that it had been awarded a grant of up to $200,000 for the project. The state will provide reimbursement for allowable expenditures. On May 5 the special revenue fund entered into a short-term loan with the General Fund for $200,000 so it could start bridge construction. During FY2017 the special revenue fund expended $165,000 for allowable bridge construction costs, for which it submitted documentation to the state. Reimbursement was received from the state on December 13, 2017.
Explanation / Answer
Note: No journal entry will be made for notification of grant approval on May 1, 2017;
Date
Accounts Titles & Explanation
Debit
Credit
May 1, 2017
No Journal entry required
Date
Accounts Titles & Explanation
Debit
Credit
May 5, 2017
Cash
$200000
Interfund Loans Payable-current
$200000
(For recording loan from General Fund)
Date
Accounts Titles & Explanation
Debit
Credit
During FY 2017
Expenditures
$165000
Vouchers Payable
$165000
(For recording incurred of expenditures)
Due from State Government
$165000
Revenues
$165000
(For recording at the time of submitting documentation)
Date
Accounts Titles & Explanation
Debit
Credit
Dec. 13, 2017
Cash
$165000
Due from State Government
$165000
(For receipts of the grant reimbursement funds)
Date
Accounts Titles & Explanation
Debit
Credit
Dec. 31, 2017
Revenues
$165000
Expenditures
$165000
(Adjusting and closing entry made)
Note: No additional entries will be made because at the end of this year eligibility requirements not met for the remaining $35,000.
Date
Accounts Titles & Explanation
Debit
Credit
May 1, 2017
No Journal entry required