(Journal entries for a Private Purpose Trust Fund)

1. The City of Newfonia received $\$ 2$ million from the First Tire Company. The company required the city to maintain the principal of the gift and any income to be used to provide resources to improve a privately owned automobile racetrack.

2. The city invested the entire gift in certificates of deposit (CDs).

3. Investment income of $\$ 100,000$ was received in cash.

4. Because plans to improve the racetrack were incomplete, the $\$ 100,000$ from part (3) was reinvested in short-term CDs.
5. After the improvement plans were completed and the short-term CDs matured, the city used the $\$ 100,000$ of investments and the interest income of $\$ 1,000$ to pay for part of the racetrack improvements.
6. As part of a continuing campaign, the city received an additional $\$ 300,000$ gift from the First Tire Company. The same restrictions, as indicated in part (1), applied to this gift. The proceeds of the gift were immediately invested in CDs.
7. Investment income of $\$ 112,000$ was received in cash.
8. Additional work on the racetrack totaling $\$ 97,000$ was paid for.
9. Interest income of $\$ 2,300$ was accrued at the end of 2004 .
10. The General Fund charged the Racetrack Fund $\$ 3,000$ : $\$ 2,000$ for managing the investments and $\$ 1,000$ for administering the fund. The entire amount was paid in cash.
Required: 1. Prepare the journal entries necessary to record these events on the books of the Automobile Racetrack Fund.
2. Prepare a statement of changes in fiduciary fund net assets for 2004 for the Automobile Racetrack Fund.
3. Prepare a statement of fiduciary fund net assets for the Automobile Racetrack Fund at December 31, 2004.
4. Prepare the closing entry (entries) for the Automobile Racetrack Fund.