Final answer:
A capital projects fund is used to finance major capital facilities. Journal entries for short-term borrowing can be recorded to be refinanced with long-term debt or to be repaid with revenue.
Step-by-step explanation:
A capital projects fund is a fund that is used by government entities to account for the acquisition and construction of major capital facilities. It is used to finance projects such as building roads, bridges, schools, and public infrastructure.
When recording short-term borrowing in a capital projects fund, there are two possible journal entries:
TO be refinanced with LT debt: Debit Cash and Credit Long-term debt
To be repaid with revenue: Debit Cash and Credit Revenue
These journal entries reflect the temporary nature of the borrowing and the intended source of repayment.