The following events occurred as part of the operations of Craig State University, a public university:1. To construct a new computer complex, the university floated at par a $22,000,000, 7% serial bond issue on October 1, paying interest on June 30 and December 31. Accrued interest is to be transferred to the retirement of indebtedness plant fund when construction begins. Construction costs are to be accumulated in the unexpended plant fund until the unit is completed.2. Since construction has begun, the accrued interest, which must be used to assist in meeting bond interest payments, is transferred. Payments for construction to date total $5,000,000.3. On December 31, a mandatory transfer of $385,000 is made from the unrestricted current fund to cover the remainder of the interest due on December 31 on the bond issue.4. The bond interest due on December 31 is paid.5. Construction of the complex is completed at an additional cost of $17,000,000. Payment is made for $16,000,000; the balance will be paid in one year under a retained percentage agreement.6. The cost of the complex is transferred.7. A required transfer of $2,770,000 is made from the unrestricted current fund to cover redemption of the first serial bond of $2,000,000 plus interest.8. Payments are made for the bond principal and interest in item (7).9. Gifts of land and a building were received, appraised at $200,000 and $350,000, respectively. The state’s leading industrialist made the gift on condition that the university would assume a $90,000 mortgage on the property.10. Pledges of $100,000 to be paid in one year were received with the understanding that the funds would be used to remodel the building received in item (9). It is estimated that $5,000 of the pledges will not be collected.11. A donor contributed $100,000 in cash for the acquisition of rare first editions for the university library. The director of the library located a collection of the first editions that was available for $160,000. The university board transferred $60,000 from the unrestricted current fund to cover the difference.12. The first edition collection is purchased, and payment is made.Prepare journal entries to record the events, indicating in which funds the entries are made.
The following events occurred as part of the operations of Craig State University, a public university:
1. To construct a new computer complex, the university floated at par a $22,000,000, 7% serial bond issue on October 1, paying interest on June 30 and December 31. Accrued interest is to be transferred to the retirement of indebtedness plant fund when construction begins. Construction costs are to be accumulated in the unexpended plant fund until the unit is completed.
2. Since construction has begun, the accrued interest, which must be used to assist in meeting bond interest payments, is transferred. Payments for construction to date total $5,000,000.
3. On December 31, a mandatory transfer of $385,000 is made from the unrestricted current fund to cover the remainder of the interest due on December 31 on the bond issue.
4. The bond interest due on December 31 is paid.
5. Construction of the complex is completed at an additional cost of $17,000,000. Payment is made for $16,000,000; the balance will be paid in one year under a retained percentage agreement.
6. The cost of the complex is transferred.
7. A required transfer of $2,770,000 is made from the unrestricted current fund to cover redemption of the first serial bond of $2,000,000 plus interest.
8. Payments are made for the bond principal and interest in item (7).
9. Gifts of land and a building were received, appraised at $200,000 and $350,000, respectively. The state’s leading industrialist made the gift on condition that the university would assume a $90,000 mortgage on the property.
10. Pledges of $100,000 to be paid in one year were received with the understanding that the funds would be used to remodel the building received in item (9). It is estimated that $5,000 of the pledges will not be collected.
11. A donor contributed $100,000 in cash for the acquisition of rare first editions for the university library. The director of the library located a collection of the first editions that was available for $160,000. The university board transferred $60,000 from the unrestricted current fund to cover the difference.
12. The first edition collection is purchased, and payment is made.
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