Evergreen County acts as the disbursing agent for a state grantfor the performing arts. The state is responsible for determiningwhich local governments are eligible for the grant money and forfollowing up to ensure that the recipients comply with therequirements of the grant. The county receives the grant funds anddisburses them according to the schedule provided by the state.When the county was asked to participate, the county’s attorney wasconcerned that the county might be held responsible for anydisallowed costs. The state agreed to accept responsibility for anydisallowed costs, so the county decided to act as the agent for thestate for this grant.
The schedule for the grant funds for 2017 is shown below.
City of Boulder $ 2,100,000
Aspen Township 1,400,000
Firtree Village 600,000
Total $ 5,000,000
a. Prepare the general journal entriesnecessary to record Evergreen County’s receipt of the money onDecember 31, 2017 (the end of its fiscal year) and disbursement ofthe grant funds on January 2, 2018
b. Prepare the general journal entries requiredto record Aspen Township’s receipt of the funds; assume that fundsare to be used to construct a new performing arts center and alltime and eligibility requirements have been met.