An alumnus of Cedar Valley University donates a building with a fair value of $15 million. The only donor restriction is that the university must use the building for business school activities for at least five years. Building has an estimated remaining life of 30 years, with no residual value. Straight-line depreciation is appropriate. Cedar Valley plans to use the building for its new MS in Accounting program, offered on a part-time basis to working professionals. Depreciation on the building is allocated as follows: 75% to programs and 25% to administration.
Required
Prepare the journal entries to record the donation and the first year's depreciation on the building. If an entry affects net assets, indicate which category of net assets is affected.

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The Answer of An alumnus of Cedar Valley University donates a building with a fair value of $15 million. The only donor restriction is that the university must use the building for business school activities for at least five years. Building has an estimated remaining life of 30 years, with no residual value. Straight-line depreciation is appropriate. Cedar Valley plans to use the building for its new MS in Accounting program, offered on a part-time basis to working professionals. Depreciation on the building is allocated as follows: 75% to programs and 25% to administration.
Required
Prepare the journal entries to record the donation and the first year's depreciation on the building. If an entry affects net assets, indicate which category of net assets is affected.

An Alumnus of Cedar Valley University Donates a Building with a Fair