The City of Island Grove uses encumbrance accounting and its fiscal year ends on June 30. On May 6, a purchase order was approved and issued for supplies in the amount of $6,000. Island Grove received these supplies on June 2, and the $6,000 invoice was approved for payment. What General Fund journal entry or entries should Island Grove make on June 2, upon receipt of the supplies and approval of the invoice?

Journal entries

Explanation:

The journal entries are as follows

Encumbrance outstanding Dr $6,000

        To encumbrance $6,000

(Being the receipts of the supplies is recorded )

Expenditure $6,000

   To  vouchers payable       $6,000

(Being the approval of the invoice approval is recorded)

Only these two entries are recorded in the city of island grove books

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