Question

JE for capital projects fund: principal of private purpose invested and income receive transferred to capital projects

1. JE to record transfer of income from private purpose
2. JE record the transfer of cash
3. From private purpose trust point of view: record obligation to transfer income to capital projects
4. Transfer of funds to capital projects fund

Answer 1

The student's question concerns the journal entries for handling the transfer of income from a private purpose trust to a capital projects fund in governmental accounting.

Thus the corret opction is:1.2.3.4

Step-by-step explanation:

The student is asking about journal entries (JEs) related to a capital projects fund in governmental accounting, specifically dealing with the transfer of income from a private purpose trust to a capital projects fund.

The process requires a series of journal entries to record the transfer of investment income and the related cash movements from the perspective of both the private purpose trust and the capital projects fund.

Journal Entries for Capital Projects Fund

1. Transfer of income from the private purpose trust: This entry would debit an investment income account in the trust and credit a due to capital projects fund account, or similar.
2. Transfer of cash: This entry would debit a due from private purpose trust account in the capital projects fund and credit cash or a similar asset account.
3. From the private purpose trust's point of view: This entry would debit a due to capital projects fund account and credit cash or a similar asset account to record the obligation to transfer income to the capital projects fund.
4. Transfer of funds to capital projects fund: The final entry would debit cash in the capital projects fund and credit the revenue from the private purpose trust.