Answer:
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
