The City of Auburn Hills decided to pool the investments of the General Fund with Bloomfield Hills School District and Wayne Township in an investment trust fund to be managed by the City of Auburn Hills. Each of the pool participants had reported its investments at fair value (FV) at December 31, 2020. At the date of the creation of the pool, February 15, 2021 the fair value of each of the pool participants was as follows:

Investments

12/31/2020 2/15/2021

City of Auburn Hills General Fund $ 890,000 $ 950,000

Bloomfield Hills School District 4,200,000 4,230,000

Wayne Township 3,890,000 3,870,000

REQUIRED:

1. Record the entries that should be made by the City, School District and Township on February 15 which shows their participation in the investment pool trust.

2. Prepare the journal entries for the following transactions in the investment pool trust.

a. Record the investments transferred to the pool; assume that the investments of the Citys General Fund were in U.S. Treasury notes and the investments of both the school district and township were in certificates of deposit (CDs).

b. On September 15 interest on Treasury notes in the amount of $25,000 was collected.

c. Interest on CDs accrued at year end amounted to $14,000.

d. At the end of the year, undistributed earnings were allocated to the investment pool participants.