A successful businessman in the community has contacted the Moose County Board of Commissioners about donating income-producing securities to the County to support a particular activity. Under the agreement, the County would be required to maintain the principal amount of the gift but could use the resulting earnings. The following events occurred in 2020:

Securities, which had an original cost of $4,250,000 were donated to the County on January 1. The fair value of the securities at that date was $5,839,000, including

Corporate equities of $2,825,000.

Corporate bonds of $3,000,000.

Accrued interest receivable on the bonds of $14,000.

During the year, the fund received $180,000 in interest payments on the bonds. At the end of the year, accrued interest on the bonds totaled $16,500.

page 211During the year, the fund received dividends on the corporate equities of $98,000.

During the year, the fund paid $230,000 supporting activities identified in the trust agreement and had outstanding bills to be paid of $6,000.

The fair value of the securities at December 31 was

Corporate equities of $2,785,000.

Corporate bonds of $3,060,000.

Required:

You are to prepare financial statements for the fund. In Part 1, the activities supported by the fund benefit the citizenry in general. In Part 2, the activities benefit only selected individuals.

Part 1: Assume it is appropriate to report the gift and related transactions in a permanent fund following modified accrual basis statements. Using the Excel template provided

1. Prepare journal entries recording the events above.

Part 2: Assume it is appropriate to report the gift and related transactions in a private-purpose trust fund following the accrual basis. Using the Excel template provided

1. Prepare journal entries recording the events above.