Question: (Journal entries and financial statements for a Private Purpose Trust Fund) Prepare
(a) the journal entries for 2012 necessary to record the following events and transactions for the College Scholarship Fund;
(b) a statement of changes in fiduciary fund net position for the fiscal year ending December 31, 2012, for the fund;
(c) a statement of fiduciary fund net position as of that date; and
(d) the 2012 closing entry (entries) for the fund.
1. The City of Rocky Basin received a $2,000,000 gift from a prominent citizen. The terms of the gift require the city to maintain the principal intact; investment income is to be used to provide college scholarships for deserving graduates of Rocky Basin High School.
2. The city invested the entire gift in CDs.
3. Interest income of $100,000 was received in cash.
4. That $100,000 was reinvested in short-term CDs.
5. The short-term CDs matured, yielding interest income of $1,000.
6. Interest income of $112,000 was received in cash.
7. Scholarships totaling $65,000 were paid to eligible students.
8. Interest income of $2,300 was accrued at the end of 2012.
9. The General Fund charged the Scholarship Fund $3,000: $2,000 for managing the investments and $1,000 for administering the fund. The amounts were unpaid at fiscal year-end.