The City of Chicago decided to pool the investments of the General Fund with Reed School District and Olan Township in an investment trust fund to be managed by the City of Chicago. 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 Newport General Fund $1,890,000 $1,950,000

Reed School District 14,200,000 14,230,000

OlanTownship 13,890,000 13,870,000

REQUIRED:

1. Record the entries that should be made by the City, School District and Township on February 15, 2021 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 into the investment pool.

b. On September 15 interest in the amount of $150,000 was collected in cash.

c. Interest on investments were accrued at year end amounted to $128,000

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