Jacqueline Ponce de Leon, a descendent of Juan Ponce de Leon, made a cash contribution of $2,400,000 to the City of Fountains to create and maintain a large dramatic fountain in front of City Hall in honor of her ancestor. For accounting purposes, the city created the Ponce de Leon Endowment Fund. The endowment requires the city to invest and conserve the principal amount of the contribution in perpetuity. Earnings must be used to maintain and operate the fountain in a pristine manner. Any changes in fair value are treated as adjustments of fund balance of the permanent fund, and do not affect earnings. Earnings are transferred each year to the Ponce de Leon Fountain Maintenance Fund, a special revenue fund. Information pertaining to transactions of the endowment and special revenue funds for the fiscal year ended June 30, 2017, follows.

1.	The contribution of $2,400,000 was received and recorded on December 31, 2016.
2.	On December 31, 2016, the city purchased a certificate of deposit in the amount of $1,800,000 that yields 4% per year payable on June 30 and December 31. On that date, the city also purchased bonds having a face value of $480,000 for $494,300. The bonds mature on July 1, 2025 (102 months from the date of purchase), and pay interest of 5 percent per year semiannually on June 30 and December 31. Assume the interest payment for December 31, 2016 was paid to the previous owner prior to the citys purchase of the bonds.
3.	On June 30, 2017, interest on the certificate of deposit and the bonds was received by the endowment fund.
4.	Interest from both the certificate of deposit and the bonds was transferred to the Ponce de Leon Fountain Maintenance Fund.
5.	On June 30, 2017, the market value of the bonds was $498,400. The value of the certificate had not changed.

Required information

Required

a.

Prepare in general journal format the entries required in the Ponce de Leon Endowment Fund to record the transactions occurring during the fiscal year ending June 30, 2017, including all appropriate adjusting and closing entries. (Note: Ignore related entries in the governmental activities journal at the government-wide level and the Fountain Maintenance Fund. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Required Journal Entries:

1.Record the contribution received.

2.Record the purchase of bonds and a certificate of deposit.

3.Record the interest received on the investment

4. Record the transfer of interest to the Ponce de Leon Fountain Maintenance Fund.

5. Record the change in the market value of the bonds.

6. Record the adjusting entry.

7. Record the closing entry.

b. Prepare the following financial statements: 1. A balance sheet for the Ponce de Leon Fountain Endowment Fund as of June 30, 2017 CITY OF FOUNTAINS Ponce de Leon Endowment Fund Balance Sheet As of June 30, 2017 Assets Current Assets Total Current Assets Investments: Total Investments Total Assets Fund Balance Fund Balance: Total Fund Balance 2. A statement of revenues, expenditures, and changes in fund balance for the Ponce de Leon Fountain Endowment Fund for the year ended June 30, 2017 CITY OF FOUNTAINS Ponce de Leon Endowment Fund Statement of Revenues, Expenditures and changes in Fund Balance For Year Ended June 30, 2017 Revenues Earned for Transfer to Expendable Trust Fund: Total Revenue Earned for Transfer Total Revenues Other Financing Uses: Excess of Revenue over Other Financing Uses Fund Balance, July 1, 2016 Fund Balance, June 30, 2017