The City of Wetteville Has a Fiscal Year Ending June

Essay

The City of Wetteville has a fiscal year ending June 30.Examine the following transactions for Wetteville:
(A. )On 6/1/08,Wetteville enters into a 5-year lease on a copying machine.The lease meets the criteria of a capital lease and carries an implied interest rate of 10%.The copier has a present value of $2,300.Wetteville has to put a $300 down payment on the lease at the beginning of the lease with monthly payments thereafter of $42.49.
(B. )On 6/5/08,Wetteville opens a new landfill.The engineers estimate that at the end of 10 years the landfill will be full.Estimated costs to close the landfill are currently at $3,500,000.
(C. )On 6/15/08,the end of the two-week pay period,Wetteville has $20,000 in accrued vacation pay related to the payroll for the period.The city estimates that $5,000 of this pay will be taken by the end of this summer and the rest will be used next summer.
(D. )On 6/18/08,Wetteville receives a donation of a vintage railroad steam engine.The engine will be put on display at the local town park.A fee will be charged to actually climb up into the engine.The engine has been valued at $500,000.
(E. )On 6/30/08,Wetteville makes its first payment on the leased copier.The $42.49 payment includes $16.68 interest.
(F. )On 6/30/08,Wetteville estimates that the landfill is 2% filled.
Required:
Prepare the journal entries for the above transactions in the general fund,on the dates mentioned for each lettered item,for the purposes of preparing the fund-based financial statements.