Jacqueline Ponce de Leon, a descendent of Juan Ponce de Leon, made a cash contribution of $1,500,000 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 $1,500,000 was received and recorded on December 31, 2016. 2. On December 31, 2016, the city purchased a certificate of deposit in the amount of $1,000,000 that yields 5% per year payable on June 30 and December 31. On that date, the city also purchased bonds having a face value of $400,000 for $406,300. The bonds mature on July 1, 2025 (102 months from the date of purchase), and pay interest of 6 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 $409,600. The value of the certificate had not changed.