In: Accounting
The City of Ahamo and Dougslost County pooled their investments in an investment pool to be managed by the county.
At time Investments were Pooled |
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Existing Book Value |
Current Market Value |
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City of Ahamo (T-Notes) |
5,070,000 |
5,450,000 |
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Dougslost County (CDs) |
3,010,000 |
3,245,000 |
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8,080,000 |
8,695,000 |
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Show in good form the entries made on the books of the investment poolto record the following transactions.
a. The assets were transferred into the investment pool.
b. A CD that was on the books at $500,000 matured. The investment pool received $530,000 (which includes $30,000 in interest). The entire amount was invested in a CD from another bank.
c. Interest on Treasury Notes in the amount of $90,000 was collected, along with $400,000 in interest on CDs. These amounts were reinvested in Treasury Notes.
d. The investment pool then determined each member’s share of the interest revenues andrecordedthose amounts. Use the following table to structure your analysis.
Investment |
Percentage |
Earnings |
|
City of Ahamo |
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Dougslost County |
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Total |
Journal Entries | ||||
Sl.no | Particulars | Debit | Credit | |
1 | Assets Transferred to Invest Ment Pool | |||
the investment poolto | 8,080,000.00 | |||
City of Ahamo (T-Notes) | 5,070,000.00 | |||
Dougslost County (CDs) | 3,010,000.00 | |||
2 | the investment poolto | 530,000.00 | ||
the investment poolto | 500,000.00 | |||
Intrest on CD's | 30,000.00 | |||
Investment Poolto( Another Bank CD) | 530,000.00 | |||
Bank | 530,000.00 | |||
3 | Bank | 490,000.00 | ||
Intrest on T-notes | 90,000.00 | |||
Intrest on CD's | 400,000.00 | |||
The Investment Poolto (T-notes) | 490,000.00 | |||
Bank | 490,000.00 | |||
4 | Investment | Percentage | Earnings | |
City of Ahamo T-notes | 5,070,000.00 | 1.78 | 90,000.00 | |
Dougslost County CD's | 3,010,000.00 | 14.29 | 430,000.00 | |
Total | ||||
Calculation of Total Earnings | ||||
Earnings | On Sale | On Year End | Total | |
Intrest on CD's | 30,000.00 | 400,000.00 | 430,000.00 | |
Intrest on T-notes | - | 90,000.00 | 90,000.00 | |