Grand View University, a private college in Iowa, receives the following donations:
1) A parent of a current accounting student contributes $500,000 with the stipulation that the donation be used to partially fund a new accounting study area within the business school. The college does not know whether it can accumulate enough additional resources to go ahead with the project.
2) An accounting alumnus contributes $200,000 to the accounting department. The alumnus stipulates that the principal of the contribution remain intact, and any investment income received in cash must be used to fund a semiannual speaker series on data analytics topics. The college invests the $200,000 in securities, and reports investment income of $7,000, received in cash. The $7,000 will be used to fund speaker transportation and fees next year. The investments are worth $202,000 at year-end.
3) A retired recruiter from a local CPA firm notifies the college that her will states that $600,000 of her estate will be paid to the accounting department of the college, with no restrictions on use.
4) A friend of the accounting department donates furniture valued at $30,000, to be used in department conference rooms.
5) The furniture in item 4. depreciates by $3,000.
6) Alumni and friends contribute $100,000 to the accounting department. The chair of the department sets aside $30,000 of these contributions to fund faculty continuing education activities.
Required
Prepare the journal entry to record each contribution. If the account used affects net assets, indicate the category of net assets that is affected. Use N/A to indicate if no entry is appropriate.

Question

Quizplus · Accepted Answer

The Answer of Grand View University, a private college in Iowa, receives the following donations:
1) A parent of a current accounting student contributes $500,000 with the stipulation that the donation be used to partially fund a new accounting study area within the business school. The college does not know whether it can accumulate enough additional resources to go ahead with the project.
2) An accounting alumnus contributes $200,000 to the accounting department. The alumnus stipulates that the principal of the contribution remain intact, and any investment income received in cash must be used to fund a semiannual speaker series on data analytics topics. The college invests the $200,000 in securities, and reports investment income of $7,000, received in cash. The $7,000 will be used to fund speaker transportation and fees next year. The investments are worth $202,000 at year-end.
3) A retired recruiter from a local CPA firm notifies the college that her will states that $600,000 of her estate will be paid to the accounting department of the college, with no restrictions on use.
4) A friend of the accounting department donates furniture valued at $30,000, to be used in department conference rooms.
5) The furniture in item 4. depreciates by $3,000.
6) Alumni and friends contribute $100,000 to the accounting department. The chair of the department sets aside $30,000 of these contributions to fund faculty continuing education activities.
Required
Prepare the journal entry to record each contribution. If the account used affects net assets, indicate the category of net assets that is affected. Use N/A to indicate if no entry is appropriate.

Grand View University, a Private College in Iowa, Receives the Following