(1)The City of Ashland's made a cash contribution in the amount of $500,000 to be held as an endowment. To account for this endowment, the City has created the Park Endowment Fund. Under terms of the agreement, the City must invest and conserve the principal amount of the contribution in perpetuity. Earnings, measured on the accrual basis, must be used to maintain Ashland's Park in an "attractive manner." All changes in fair value are treated as adjustments of fund balance of the permanent fund and do not affect earnings. Earnings are transferred periodically to the Ashland's Park Maintenance Fund, a special revenue fund.

Below Information are related to endowment and special revenue funds for the fiscal year ended June 30, 2011:

1. The contribution of $500,000 was received and recorded on December 31, 2010.

2. On December 31, 2010, bonds having a face value of $400,000 were purchased for $406,300, plus three months of accrued interest of $6,000. A certificate of deposit with a face and fair value of $70,000 was also purchased on this date. The bonds mature on October 1, 2019 (105 months from date of purchase), and pay interest of 6 percent per annum semiannually on April 1 and October 1. The certificate of deposit pays interest of 5 percent per annum payable on March 31, June 30, September 30, and December 31.

3. On January 2, 2011, the town council approved a budget for the Ashland's Park Maintenance Fund, which included estimated revenues of $15,000 and appropriations of $13,900.

4. On March 31, 2011, interest on the certificate of deposit was received by the endowment fund and transferred to the Ashland's Park Maintenance Fund.

5. The April 1, 2011, bond interest was received by the endowment fund and transferred to the Ashland's Park Maintenance Fund.

6. On June 30, 2011, interest on the certificate of deposit was received and transferred to the Ashland's Park Maintenance Fund.

7. For the year ended June 30, 2011, maintenance expenditures from the Ashland's Park Maintenance Fund amounted to $1,300 for materials and contractual services and $11,150 for wages and salaries. All expenditures were paid in cash except for $540 of vouchers payable as of June 30, 2011. Inventories of materials and supplies are deemed immaterial in amount.

8. On June 30, 2011, bonds with face value of $100,000 were sold for $102,000 plus accrued interest of $1,500. On the same date, 2,000 shares of ABC Corporation's stock were purchased at $52 per share.

Required

a. Prepare in general journal form the entries required in the Ashland's Park Endowment Fund to record the transactions occurring during the fiscal year ending June 30, 2011, including all appropriate adjusting and closing entries. (Note: Ignore related entries in the governmental activities journal at the government-wide level.)

b. Prepare in general journal form the entries required in the Ashland's Park Maintenance Fund to record Transactions 1 to 8.

c. Prepare:

(1) A balance sheet for both the Ashland's Park Endowment Fund and the Ashland's Park Maintenance Fund as of June 30, 2011.

A statement of revenues, expenditures, and changes in fund balance for both the Ashland's Park Endowment Fund and the Ashland's Park Maintenance Fund for the year ended June 30, 2011