# On April 15, 2014, construction bids were opened and analyzed. A bid of $2,000,000 was accepted,...

## Question:

On April 15, 2014, construction bids were opened and analyzed. A bid of $2,000,000 was accepted, and the contract was awarded for the Elm Street Project. The contract provided for a retained percent age of 4 percent from each progress payment, and from the final payment, until final inspection and acceptance by the city's public works inspectors.

Required: Record the signing of the contract in the general journal of the Street Improvement Fund general journal. This transaction has no effect at the government-wide level.

## Contract:

A contract is written or spoken agreement, especially one concerning employment, sales, or tenancy, that is enforceable by law. A valid contract requires consideration.

## Answer and Explanation: 1

Journal Entry:

Particulars | Debit $ | Credit $ |
---|---|---|

Elm Street Project | $2,000,000 | |

Outstanding-Elm Street Project | $2,000,000 | |

(Being the signing of contract been recorded) |

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Chapter 3 / Lesson 10Discover the meaning of a journal entry and a trial balance, types of journal entries, how a general ledger differs from a trial balance, and some examples.

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