A capital asset (equipment) with a fair value of $1,500,000 and land with a fair value of $2,000,000 is donated to a not-for-profit organization on January 1, 2020. The equipment has a ten year useful life. The organization will use the equipment in its operations. The NFPO has a December 31 year end.
Prepare the journal entries (including amortization) if the organization uses the:
a) the deferral method for contributions.
b) the restricted fund method with a capital fund.

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The Answer of A capital asset (equipment) with a fair value of $1,500,000 and land with a fair value of $2,000,000 is donated to a not-for-profit organization on January 1, 2020. The equipment has a ten year useful life. The organization will use the equipment in its operations. The NFPO has a December 31 year end.
Prepare the journal entries (including amortization) if the organization uses the:
a) the deferral method for contributions.
b) the restricted fund method with a capital fund.

A Capital Asset (Equipment) with a Fair Value of $1,500,000