How should these pledges be reflected

Assignment Help Financial Accounting

Reference no: EM132806149

Question - On January 1, 20X6, a $500,000 endowment was received from the estate of Carmen Foxx. The funds were invested in a bond, purchased on par, that pays 3 percent interest annually on December 31. The interest may be used by the NFPO for operating or programming costs.

On December 24, 20X6, Help Today received a donation of $45,000 from Dr. Chen. Dr. Chen stipulated that the donation must be used to buy a new van. Help Today used the donation to purchase a van on January 2, 20X7. The van will be amortized over five years, using the straight-line method. No residual value is expected.

Required -

a) Prepare journal entries for 20X6 and 20X7 for the above donations using the

i. deferral method and

ii. restricted fund method

b) At Help Today's annual fundraiser, pledges of $225,000 were received. How should these pledges be reflected on Help Today's financial statements?

Reference no: EM132806149

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