The City of Ahamo and Dougslost County pooled their investments in an investment
ID: 2436229 • Letter: T
Question
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
Existing Book Value
Current Market Value
City of Ahamo (T-Notes)
5,070,000
5,450,000
Dougslost County (CDs)
3,010,000
3,245,000
8,080,000
8,695,000
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
Dougslost County
Total
At time Investments were Pooled
Existing Book Value
Current Market Value
City of Ahamo (T-Notes)
5,070,000
5,450,000
Dougslost County (CDs)
3,010,000
3,245,000
8,080,000
8,695,000
Explanation / Answer
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