Evergreen County acts as the disbursing agent for a state grant for the performing arts. The state is responsible for determining which local governments are eligible for the grant money and for following up to ensure that the recipients comply with the requirements of the grant. The county receives the grant funds and disburses them according to the schedule provided by the state. When the county was asked to participate, the county’s attorney was concerned that the county might be held responsible for any disallowed costs. The state agreed to accept responsibility for any disallowed costs, so the county decided to act as the custodian for the state for this grant.
The schedule for the grant funds to be awarded in the current fiscal year is shown below:

City of Boulder........................................... $2,100,000
Aspen Township.......................................... 1,400,000
Snowton.......................................................... 900,000
Firtree Village................................................. 600,000
Total........................................................... $5,000,000

Required
a. Prepare the general journal entries necessary to record Evergreen County’s receipt and disbursement of the grant money in March.
b. Prepare the general journal entries required to record Aspen Township’s receipt of the funds; assume that funds are to be used to construct a new performing arts center and all time and eligibility requirements have been met.
c. How would the activities related to the grant be reported in the county’s financial statements?