Journalize the Following Utility Transactions in the Hazzard County Enterprise

question 31

Essay

Journalize the following utility transactions in the Hazzard County Enterprise Fund:
1.The utility sold $4,000,000 of 6.5% revenue bonds at 98 on July 1,2014 (an interest payment date).The bond proceeds are to be used for new plant construction and the issue will mature in 20 years.Interest is paid semi-annually on July 1 and January 1.
2.Depreciation for the year-ended December 31,2014 included $300,000 for buildings and $190,000 for equipment.
3.The utility paid $600,000 in construction costs for the new plant.The plant is still under construction.
4.Interest on the revenue bonds was accrued at year-end,December 31,2014.Straight-line amortization is used for bond discounts and premiums.

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Definitions:

Supply Curve

A graph showing the relationship between the price of a good and the quantity of that good supplied.

Effective Price

The final price after accounting for rebates, discounts, or other financial adjustments.

Empowerment

The act of giving power or authority to someone, enhancing their capabilities and confidence.

Centralization

The concentration of decision-making and administrative power within a central group or location within an organization.