Q&A Hero

Question

A trust fund was created to assist local students in financial need. The following transactions occurred in the trust.

1. The committee forming the fund was able to raise $700,000 and invested the funds so that the principal would remain indefinitely, and the earnings would be used to aid needy students.

2. During the year, the fund earned $65,000 interest. Earnings remain invested in the trust until withdrawn to distribute, so the interest was invested.

3. $50,000 of the investments were sold, withdrawn, and distributed to provide scholarships.

4. The fund-raising committee contributed an additional $200,000 cash to the fund. This cash was deposited into the account and invested.

5. Interest earned but not yet deposited into the investment account was accrued at $17,000.

Required:

Prepare the necessary journal entries for each of the above transactions for the trust fund.