For the year ended June 30, 20X7, the trust fund should report the $75,000 spent to support local artists as a

a. Deduction.

b. Contra contribution.

c. Transfer out.

d. Direct adjustment from fund balance.

On August 1, 20X6, the City of Rockhaven received $1,000,000 from a prominent citizen to establish a private-purpose trust fund. The donor stipulated that the
cash be permanently invested and that the earnings from the investments be spent to support local artists. During the year ended June 30, 20X7, the fund received
$50,000 of dividends from stock investments and earned $35,000 of interest from bond investments. At June 30, $5,000 of the interest earned had not yet been
received. During the year ended June 30, 20X7, the trust fund spent $75,000 to support local artists.