Perpare journal entries to record the contribution

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The manner in which depreciation on capital assets acquired with donated funds depends on the terms of the donation.

Sea Life Aquarium, a not-for-profit entity, received a contribution of $500,000 that must be used to acquire plant and equipment. In the following year it applied the gift toward the purchase of various items of plant and equipment. Management estimates that the useful life will be 10 years (with no salvage value).

Problem 1: Perpare journal entries to record the contribution, the purchase of equipment, and first-year depreciation. Be sure to indicate the type of fund in which each entry would be made. Assume that the Aquarium adheres to current standard practice as to when resources are released from restriction.

Reference no: EM132674011

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