All facts about this NFPO are identical to those described in Problem 5, except for the following:

1. The Society will use the restricted fund method of accounting for contributions.
2. The Society will use three separate funds for reporting purposesoperating fund, collections and long-term capital assets fund, and scholarship fund. Long-term capital assets include depreciable assets with a useful life in excess of 5 years, for example, leasehold improvements.
3. The cash balance of $5,000 consisted of $1,000 in the scholarship fund and $4,000 in the operating fund.
4. The interest income is retained in the scholarship fund until it is paid out for scholarships.
5. The operating fund loaned $5,850 to the long-term capital asset fund for the shortfall between the cost of lease- hold improvements and the corporate donations for leasehold improvements.

Required

a)Show the journal entries related to the Notes and additional information. Assume $3,000 of Interest is transferred to the operating fund from the endowment fund.Also assume the scholarship is paid from the operating fund.

b)Prepare a Statement of financial position for December 31, Year 5.