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3. Accounting for a permanent fund Scenario: Mr. Pedro Donante donated...

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Accounting

3. Accounting for a permanent fund

Scenario:

Mr. Pedro Donante donated the sum of $ 200,000 to the city of Loma Vista for the maintenance of a public park. He established by legal document that the principal be invested, but it could never be spent. Only the winnings can be spent. The city established a permanent fund. The proceeds will be transferred to a "Special Revenue Fund."

to. Record the cash received by the donor

b. The $ 200,000 invested in securities.

c. During the year, $ 6,000 of earned income was received on the investment.

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