Final Answer:
The entries in both funds would involve a debit to the Library Capital Fund and a credit to the GF (General Fund).
Step-by-step explanation:
When the GF (General Fund) contributes $150,000 to the Library Capital Fund, the accounting entries will reflect this transfer. Firstly, a debit entry of $150,000 will be made in the Library Capital Fund to record the increase in assets or cash received from the GF. This debit represents the inflow of funds into the Library Capital Fund account. On the other hand, a corresponding credit entry of $150,000 will be made in the GF to signify the decrease in its balance as it transfers the specified amount to the Library Capital Fund.
Debiting the Library Capital Fund account ensures that the fund's balance reflects the additional contribution received, while crediting the GF account appropriately records the reduction in its balance due to the transfer. These entries comply with accounting principles, ensuring accurate financial recording and transparency in tracking funds allocated or transferred between different funds within an organization.
Such transactions are crucial for maintaining accurate financial statements and demonstrating the movement of funds from one designated fund (GF) to another (Library Capital Fund) within an entity's accounting records.