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
<em>(To record the cash received on the issue of Bond)</em>
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
<em>(To Record the inception of the construction contract) </em>
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
<em> (To Record the encumbrances outstanding on account)
</em>
Date Account Titles and Explanation Debit Credit
Construction Expenditure $12,000,000
Construction payable $12,000,000
<em> (To Record the encumbrances outstanding on account)
</em>
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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
<em> (To record the construction expenses paid)</em>
