Question

John Reynolds established a $500,000 trust, the income from which is to be paid to Mansfield University for general operating purposes. The present value of the income is estimated at $500,000. The Wyndham National Bank was appointed by Reynolds as trustee of the fund. What journal entry is required in Mansfield's books

Answer 1

Based on the trust amount and the present value of income, the journal entry in Mansfield's books is:

Date          Account title                                   Debit              Credit

                 Beneficiary Interest in Trust       $500,000

                 Contributions with Donor                                      $500,000.

                  Imposed Restrictions

What journal entry would record the transaction?

The beneficiary interest account should be debited with the $500,000 that was used to establish the trust.

It should be credited to the Contributions account but only an account that accounts for the restrictions on usage.

Find out more on journal entries at https://brainly.com/question/14279491.

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