Assume that Pine City received $100,000 bequest from the will of a resident that is restricted to be permanently retained and investment with the investment earnings going to support children of public safety officer who were killed or injured in the line of duty. The city invests this gift and earns 5% on the principal in the first year. At the end of the first year, $2,000 is paid to a university at which a child of a slain police officer is attending. Record the journal entries for each of these transactions: (1) receipt of the gift, (2) investment earnings in year 1, and (3) distribution in year 1.

(1) Receipt of the gift by a donor.

DateAccount NameDebitCredit

(2) Recognition of investment earnings for the year.

DateAccount NameDebitCredit

(3) Distribution of funds for educational needs of a beneficiary.

DateAccount NameDebitCredit