Final answer:
The journal entries provided are for the recording of depreciation on capital assets by the City of Loveland. Entries a) and c) appropriately record the depreciation expense and associated accumulated depreciation. Entries b) and d) are unusual and do not follow standard accounting practices for recording the initial cost of buildings.
Step-by-step explanation:
The subject of the question involves preparing journal entries for transactions conducted by the City of Loveland. The entries are related to recording depreciation for capital assets, which is an element focused on in financial accounting, specifically within the confines of governmental accounting. For the transactions listed in the question, entries a) and c) are correct, reflecting the recording of depreciation expense for the period. However, entries b) and d) seem to have a misunderstanding, as they seem to record the initial asset value directly against accumulated depreciation, which does not align with typical accounting practices. Correct journal entry for a half year of straight-line depreciation expense on the building might look like this, assuming the building cost is, for example, $14,640,000 (to match the provided depreciation expense of $488,000 for half a year):
- Debit: Depreciation Expense $488,000
- Credit: Accumulated Depreciation - Buildings $488,000
This entry reflects the expense recognition of the building's value over time, contributing to an accurate representation of the building's net book value on the city’s financial statements.