The City of Monroe Police Department pension plan, a single-employer, defined-benefit plan, reported the following account balances as of January 1, 2015:

Debits

Credits

Cash

$140,000

Accrued Interest Receivable

72,000

Investments: Bonds

5,300,000

Investments: Common Stock

2,790,000

Accounts Payable

$27,000

Net Assets Held in Trust for Employee Benefits

8,275,000

Totals

$ 8,302,000

$8,302,000

Required:

a. Open a general journal for the City of Monroe Police Department Pension Trust Fund and record the following transactions for the year ending December 31, 2015:

(1) Member contributions were received in the amount of $400,000. The City General Fund contributed the same amount.

(2) Interest was received in the amount of $386,900, including the accrued interest receivable at the beginning of the year. The interest accrual at year end amounted to $86,000.

(3) During the year, common stock dividends amounted to $125,000.

(4) Investments were made during the year in common stock in the amount of $575,000.

(5) Annuity benefits in the amount of $377,400, disability benefits of $ 82,020 and refunds to nonvested terminated employees of $39,800 were recorded as liabilities.

(6) Accounts payable, in the amount of $507,500, were paid in cash.

(7) During the year, common stock valued at $505,000 was sold for $506,800. A portion of these funds, $502,000 were invested in common stock of a different company.

(8) At year-end, the market value of investments in bonds increased by $12,750; the market value of investments in stocks decreased by $5,770.

b. Post the entries to the Police Department Pension Trust ledger (t-accounts).

c. Prepare and post an entry closing all nominal accounts to Net Assets.

(a)

JOURNAL ENTRIES

CITY OF MONROE POLICE DEPARTMENT PENSION TRUST FUND

FOR THE YEAR ENDING DEC 31,2015

PARTICULARS                                                  DEBIT($)CREDIT($)

1. CASH A/C DR                                                 8,00,000  

  TO MEMBERS CONTRIBUTION A/C                                   4,00,000

  TO CITY GENERAL FUND A/C                                           4,00,000

  (BEING CONTRIBUTION RECEIVED)  

2.CASH A/C DR                                                   3,86,900  

  TO INTEREST A/C                                                             3,14,900

  TO ACCRUED INTEREST A/C                                               72,000

  (BEING INTEREST RECEIVED)  

  ACCRUED INTEREST A/C DR                               86,000  

  TO INTEREST A/C                                                               86,000

  (BEING INTEREST ACCRUED)  

3.CASH A/C DR                                                     1,25,000  

  TO DIVIDEND A/C                                                             1,25,000

  (BEING DIVIDEND RECEIVED ON COMMON STOCK)  

4. INVESTMENT IN COMMON STOCK A/C DR    5,75,000  

   TO CASH A/C                                                                     5,75,000

  (BEING AMOUNT INVESTED IN COMMON STOCK)  

5.ANNUITY BENEFIT A/C DR                             3,77,400  

  DISABILITY BENEFIT A/C DR                                82,020  

  REFUND TO NON VESTED TERMINATED EMPLOYEES A/C DR39,800  

  TO ANNUITY BENEFIT PAYABLE A/C                               3,77,400

  TO DISABILITY BENEFIT PAYABLE A/C                                  82,020

  TO REFUND TO NON VESTED TERMINATED EMPLOYEES PAYABLE A/C                                                      39,800

 (BEING LIABILITIES RECORDED)  

6.ACCOUNTS PAYABLE A/C DR                         5,07,500  

  TO CASH A/C                                                                  5,07,500

  (BEING ACCOUNTS PAYABLE PAID)  

7.CASH A/C DR                                                        5,06,800  

  TO INVESTMENT IN COMMON STOCK A/C                     5,05,000

  TO PROFIT ON SALE OF COMMON STOCK A/C                    1,800

  (BEING INVESTMENT IN COMMON STOCK SOLD)  

  INVESTMENT IN COMMON STOCK A/C DR        5,02,000  

  TO CASH A/C                                                                      5,02,000

  (BEING AMOUNT INVESTED IN A DIFFERENT COMMON STOCK)  

8.INVESTMENT IN BONDS A/C DR                             12,750  

  TO INVESTMENT IN COMMON STOCK A/C                           5,770

  TO PROFIT AND LOSS A/C                                                   6,980

  (BEING INVESTMENTS RECORDED AT MARKET VALUE)

Explanation:

All payments underlined are under "credits" while those not underlined are "debits"

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