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Question: (Journal entries for an Agency Fund) Prepare the following journal entries in the Bid Deposits Fund, an Agency Fund. This fund is used to record all deposits made by contractors doing work for the city. Any earnings on these resources are required to be paid to the depositing companies.
1. Deposits totaling $750,000 were received.
2. The amount in the previous entry was invested in CDs.
3. Income from the investments totaling $70,000 was received.
4. Deposits of $93,750 were returned to contractors upon successful completion of the projects on which they had been working. In addition, these contractors received $8,750 of earnings on their deposits.
5. The books were closed for the year.
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