The City of Titanville established an Investment Trust Fund for Bay Town and Valley City. The cities contributed $ 200,000 and $ 100,000, respectively, to the fund. During 2012 the following transactions took place. Prepare journal entries to record the transactions in the Investment Trust Fund.
1. Bay Town contributed CDs valued at $ 200,000, and Valley City contributed $ 100,000 to the fund.
2. The cash contributed by Valley City was invested in U. S. government securities.
3. The CDs matured. The principal was $70,000, interest on the CDs was $ 3,000.
4. The principal amount received in the previous transaction was reinvested in municipal bonds.
5. The fund incurred internal administrative expenses totaling $ 700, of which $ 500 was paid in cash.
6. The General Fund charged the Investment Trust Fund $ 500 for managing the investments. This amount was paid in cash.
7. The trust fund income of $ 1,800 ($ 3,000 $ 700 $ 500) was distributed as provided in the trust agreement: two thirds to Bay Town and one third to Valley City.