On July 1, 2016, the City of Corfu received a gift of debt securities of XYZ Company with a nominal par) value of $1,600,000. Income is to be used to make awards for civic achievements. As of the date of the gift, the securities had a market value of $1,668,000. Included in this amount is accrued interest of $18,000. The bonds carried an annual interest rate of 5%, payable semiannually on April 1 and October 1. During the fiscal year ended June 30, 2017, the following transactions took place:
1. The gift was received.
2. On October

1 , \$ 40,000

in interest was received
3. On April

1 , \$ 40,000

in interest was received.
4. On April 1 , irrunediately after the receipt of irterest, the XYZ bonds were sold for

\$ 1,662,000

. The proceeds were irvested in

\mathrm { ABC }

bonds, which pay interest serniarrually on April 1 and October 1 . The bonds were purchased at par value.
5. On Jure 30, 2017, acened interest of

\$ 20,775

on the ABC bonds was recogrized
6. On June 30,2017 , awards were made in the arnount of

\$ 75,000

.
7. As of Jure 30,2017 , the fair value of the fair value of the

A B C

bonds was

\$ 1,664,000

, exclusive of accrued interest.
Required:
A. Record the above transactions on the books of the City of Corfu Private-Purpose Trust Fund.
B. Prepare a Statement of Changes in Fiduciary Net Position for the City of Corfu Private-Purpose Trust Fund for the year ended June 30, 2017.

Fiduciary Funds Are Used to Account for Assets Held by a Government

True/False

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