E 23-9 Prepare journal entries for a trust You serve as the trustee for the Josephine Frederick testamentary income trust. The trust was created by the will of her late husband, John. Under the terms of John’s will, all assets are transferred to the trust to cover living expenses for his spouse. Upon her demise, trust assets will be sold, with the proceeds distributed to their six children. Each is to receive an equal share.

The probate court ruled that household furnishings and John’s personal effects could be excluded from the estate.

The executor has paid all inheritance and income taxes on estate income for the period of estate administration. The estate inventory prepared by John’s estate executor showed the following assets:

Asset Cost Fair Value Cash $218,220 $218,220 Savings accounts 300,000 300,000 Microsystems common stock 163,400 400,000 Big Casino common stock 181,500 120,000 Vintage sports car 17,500 31,000 Mountain cottage 39,700 114,500 Personal residence 209,900 457,500 REQuIRED: Prepare the journal entries for the creation of the trust.