Answer:
1. No journal entry on May 1
2. May 5
Dr Cash count 200,000
Cr Interfund loans payable 200,000
3. Dr Expenditures account debited 165,000
Credit Vouchers payable account 165,000
Dr State Government account 165,000 Credit Revenue account 165,000
4. December 13
Dr Cash account 165,000
Credit Dues from state government account 165,000
5. December 31
Dr Revenue account debited 165,000
Cr Expenditure account 165,000
Step-by-step explanation:
Preparation of Journal entries
1. No journal entry on May 1
2. Preparation of Journal entry for short term loan
May 5
Dr Cash count 200,000
Cr Interfund loans payable 200,000
(To record short term loan is recorded)
3. Preparation of Journal entry for the payment of expendtiture
Dr Expenditures account debited 165,000
Credit Vouchers payable account 165,000
( To record the expenditure incurred )
Dr State Government account 165,000 Credit Revenue account 165,000
( Being recorded in the sate government)
4. Preparation of Journal entry for government reimbursement of funds
December 13
Dr Cash account 165,000
Credit Dues from state government account 165,000
(To record the receipts of dues )
5. Preparation of the Adjusted Entry for the revenue and expenditure
December 31
Dr Revenue account debited 165,000
Cr Expenditure account 165,000
( To record the closing of entries )