Prepare Journal Entries to Record the Following Grant-Related Transactions for a Municipality

question 9

Essay

Prepare journal entries to record the following grant-related transactions for a municipality special revenue fund.
1.Special Revenue Fund awarded an operating grant from the state,$2,500,000 (cash will be received after qualified expenditures are made).
2.Special Revenue Fund received funds of $1,600,000,temporarily transferred from the General Fund.
3.Incurred qualifying expenditures on the state grant program of $1,600,000 and paid them with funds temporarily transferred from the General Fund.
4.Received a federal grant to finance planting of trees in city,$4,500,000 (cash received in advance).
5.Incurred and paid cost of $3,000,000 for planting 10,000 trees in city.

---

Definitions:

Compounded Quarterly

Interest calculation method where the interest is added to the principal amount every three months, leading to interest on interest in subsequent periods.

Account Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Compounded Monthly

The calculation of interest where the interest earned over a month is added to the principal, and this process is repeated every month.

Compounded Monthly

The process of adding interest to the principal sum of a loan or deposit, or in other words, interest on interest, on a monthly basis.