in her will a leading citizen left a bequest of 200 000 to the clinic stipulations w 614518

VHWO, journal entries. Record the following events of Mercy Health Clinic, a VHWO:

a. In her will, a leading citizen left a bequest of $200,000 to the clinic. Stipulations were that the amount was to become the corpus of a permanent endowment. Any income received would be used first to cover any loss of principal, with the remaining revenue to be used for an educational program on mental problems. The total amount was received and invested in 8% municipal bonds purchased at face value on an interest date.

b. Three months later, half of the bond investment was sold at 101, plus $2,500 of accrued interest.

c. The remaining endowment bond investments earned $6,000. The amount is not subject to any limitations.

d. At year-end, the remaining endowment bond investments have a fair value of $103,500.