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20 October, 23:47

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.

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  1. 21 October, 02:12
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    The beginning part of the question is found below:

    The City of Monroe Scholarship Foundation private-purpose trust fund had the following account balances on January 1, 2017:

    Debits Credits

    Cash $49,500

    Accrued Interest Receivable $7,500

    Investments in Corporate Bonds $750,000

    Net Assets Held in Trust $807,000

    Totals $ 807,000 $ 807,000

    Find below the necessary journal entries in the explanation section:

    Explanation:

    The interest received = 6%*$750,000*6/12=$22,500

    Dr Cash $22,500

    Cr Interest income (balance) $15,000

    Cr Accrued interest receivable $7,500

    Additional funds of $205,500 received:

    Dr Cash $205,500

    Cr donation income $205,500

    the investment of $200,000 in corporation stock

    Dr investment in corporation stocks $200,000

    Cr Cash $200,000

    receipt of half of the year annual interest on bonds (as calculated above at $22,500)

    Dr cash $22,500

    Cr Interest income $22,500

    cash is debited when there is an inflow and credited in case of outflows

    The investment account is debited because it is an asset
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