Jefferson Hospital received money from a donor to set up an endowment fund. The following information pertains to this contribution:

During 2020

1. $2,000,000 was received to establish the fund. The requirements were

a. $100,000 of the endowment fund’s income must be used for research grants each year.

b. The remainder of income is under the discretion of the governing board.

c. The principal is expendable after the donor’s death. It shall be used to purchase equipment.

2. The cash received was invested in a number of securities.

During 2021

3. Dividends of $100,000 and interest of $300,000 were received.

4. The income was transferred to the appropriate funds.

5. Of the restricted income, only $80,000 was expended for its specified purpose during 2021.

6. The governing board specified that $200,000 of the income would be used for loans for deserving medical students.

During 2022

7. $180,000 was lent to medical students.

8. The donor died of cancer.

Required:

Set up headings for the following funds: Endowment, General, Specific Purpose, and Plant Replacement and Expansion. Prepare the entries necessary in each fund to record the events listed above.