The following transactions and events relate to the operation of a government hospital.

a. Prepare journal entries to record the effects of these transactions and events in the general ledger accounts of the hospital. Explanations of the entries may be omitted.

1. Total billings for patient services rendered, $85,000; it was estimated that bad debt losses on these billings would be $1,000 and that contractual adjustments would amount to $6,000.

2. Expenses of $15,000 were incurred for heart research. Restricted assets that were received in prior years were used to finance this research.

3. Equipment (cost, $8,000; accumulated depreciation, $5,000) was sold for $1,000.

4. Depreciation expense on buildings was recognized, $18,000.

5. Earnings on endowment investments are restricted to use for intern education; $14,000 was earned in the current year.

6. Unrestricted income on endowment investments, $3,500, was received.

7. Of the billings for patient services rendered (see item 1), $1,000 was written off.

b. Explain how each of the preceding transactions affects the Statement of Revenues, Expenses, and Changes in Net Position.