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Exercise $4-28($Algo$)$ Permanent Fund and Related Special Revenue Fund Transactions $[$LO $4-6]$

Jacqueline Ponce de Leon, a descendent of Juan Ponce de Leon, made a cash contribution of $$2,200,000$ to the City of

Fountains to create and maintain a large fountain in front of City Hall in honor of her ancestor. The city created the Ponce

de Leon Endowment Fund to account for the endowment, which requires the city to invest and conserve the principal

amount of the contribution in perpetuity. Earnings must be used to maintain and operate the fountain in a "pristine

manner." Any changes in fair value are treated as adjustments of fund balance of the permanent fund and do not affect

earnings. Earnings are transferred each year to the Ponce de Leon Fountain Maintenance Fund, a special revenue fund.

Information pertaining to transactions of the endowment and special revenue funds for the fiscal year ended June $30,$

$2023,$ follows.

$1.$ The contribution of $$2,200,000$ was received and recorded on December $31,2022.$

$2.$ On December $31,2022,$ the city purchased a certificate of deposit in the amount of $$1,600,000$ that yields $3$ percent per

year payable on June $30$ and December $31.$ On that date, the city also purchased bonds having a face value of

$$460,000$ for $$472,300.$ The bonds mature on July $1,2031(102$ months from the date of purchase$)$ and pay interest of $4$

percent per year semiannually on June $30$ and December $31.$ Assume the interest payment for December $31,2022,$ was

paid to the previous owner prior to the city's purchase of the bonds.

$3.$ On June $30,2023,$ interest on the certificate of deposit and the bonds was received by the endowment fund.

$4.$ Interest from both the certificate of deposit and the bonds was transferred to the Ponce de Leon Fountain Maintenance

Fund.

$5.$ On June $30,2023,$ the market value of the bonds was $$476,200.$ The value of the certificate had not changed.

Ponce de Leon Endowment Fund Statement of Revenues, Expenditures, and changes in Fund Balance For Year Ended June $30,2023$

Revenues Earned for Transfer to Expendable Trust Fund: Total Revenue Earned for Transfer Total Revenues Other Financing Uses: Excess of Revenue over Other Financing Uses Fund Balance, July $1,2022$ Fund Balance, June $30,2023.$ THE VALUES IN THE BALANCE SHEET NEEDS T$0$ BE CONFIRMED