The Friends of the Library (FOL), a not-for-profit entity, received a gift restricted to the acquisition of a special piece of equipment used to restore books.Late last year FOL acquired the machine at a total cost of $19,000.The machine is estimated to have a useful life of eight years and a salvage value of $3,000.In what fund should FOL make the entry to record the depreciation for the current year?

Question

Quizplus · Accepted Answer

Depreciation is typically recorded in the unrestricted fund, as it is an expense related to the use of the asset, regardless of the original restriction on the gift.

The Friends of the Library (FOL), a Not-For-Profit Entity, Received