On April 1, 2014, the Duval County School district received a $50,000 gift from

Question

On April 1, 2014, the Duval County School district received a $50,000 gift from a local civic organization with the stipulation that, on March 31 of each year, any interest earnings on the unspent principal be awarded as a scholarship to the 7th grade student with the highest academic average in mathematics over a 2 year period. A private-purpose trust fund, the Mathematics Scholarship Fund, was created.

Record the following transactions on the books of the Mathematics scholarship Fund:

1) On April 1, 2014, the gift was received and immediately invested.

2) On March 31, 2015, $1,500 in interest was received.

3) On March 31, 2015, $1,500 was awarded to Michelle Galarza, who had maintained a 4.0 grade point average over the past two years in mathematics.

4) The nominal accounts were closed.

Explanation / Answer

1)

Banka/c Dr $50,000

To Mathematics Scholarship Fund $50,000

Being Gift received from local civic organization to create mathematics scholarship

2) Fixed depoit a/c Dr $50,000

To bank $50,000

Being amount is fixed deposited

3) Bank Dr $1,500

To Interest $1,500

4) Mathematics scholorship-expense a/c Dr $1,500

To bank

Being scholorship awarded to a student

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