The City of Monroe Scholarship Foundation private-purpose trust fund had the following account balances on January 1,
Question:
The City of Monroe Scholarship Foundation private-purpose trust fund had the following account balances on January 1, 2017:
| Debits | Credits |
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 50,500 | |
Accrued Interest Receivable . . . . . . . . . . . . . . . . . . | 7,500 | |
Investments in Corporate Bonds . . . . . . . . . . | 750,000 | |
Net position Held in Trust ……………… . . . . . . . . . | | $ 808,000 |
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 808,000 | $ 808,000 |
Required:
a. Open a general journal for the City of Monroe Community Foundation Trust Fund and record the following transactions for the year ending December 31, 2017:
(1) On May 1, the first semiannual interest payment was received on the corporate bonds. The bonds pay 6 percent annual interest, semiannually on May 1 and November 1.
(2) During the first half of the year, additional contributions from individuals and foundations amounted to $205,500, in cash. From these funds, $ 200,000 were invested in RST Corporation stock on June 15.
(3) On November 1, the second semiannual interest payment was received from the investment in bonds.
(4) On November 15, a dividend was declared by RST Corporation in the amount of $2,000 and was received in cash.
(5) On December 1, RST Corporation stock was sold for $204,000 cash. Those funds were immediately invested in UVW Corporation stock.
(6) On December 15, cash scholarships in the amount of $48,000 were made to various college students.
(7) On December 31, an accrual was made for year-end interest on the corporate bonds.
(8) Also, on December 31, it was determined that the market value of the corporate bonds, exclusive of accrued interest, was $ 752,100 and that the market value of UVW Company stock was $ 199,000.
b. Post the entries to the Community Foundation Trust ledger (t-accounts).
c. Prepare and post an entry closing all nominal accounts to Net position.
Accounting Volume 2
ISBN: 978-0176509743
2nd Canadian edition
Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren