On January 1, Alan King decided to deposit $60,800 in a savings account that will provide funds four years later to send his son to college. The savings account will earn 7% annually. Any interest earned will be added to the fund at year-end (rather than withdrawn). (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Required:

1. How much will be available in four years?

2. Assume that Alan King follows GAAP. Prepare the journal entry that Alan should make on January 1.

3. What is the total interest for the four years?

4. Assume that Alan King follows GAAP. Prepare the journal entry that Alan should make on December 31 of the first year and December 31 of the second year.