On January 2, 2020, a donor makes a documented promise to contribute $2,000,000 to an NFP organization on December 31, 2021. There are no restrictions on the use of the contribution. On December 31, 2021, the organization receives the $2,000,000 in cash. The appropriate risk-adjusted discount rate is 4%. The organization's accounting year ends December 31.
Required
Prepare the journal entries to record this contribution in 2020 and 2021. Include any necessary year-end adjusting entries. For accounts that appear on the statement of activities, specify which category of net assets is affected. Round answers to the nearest dollar.

Question

Quizplus · Accepted Answer

The Answer of On January 2, 2020, a donor makes a documented promise to contribute $2,000,000 to an NFP organization on December 31, 2021. There are no restrictions on the use of the contribution. On December 31, 2021, the organization receives the $2,000,000 in cash. The appropriate risk-adjusted discount rate is 4%. The organization's accounting year ends December 31.
Required
Prepare the journal entries to record this contribution in 2020 and 2021. Include any necessary year-end adjusting entries. For accounts that appear on the statement of activities, specify which category of net assets is affected. Round answers to the nearest dollar.

On January 2, 2020, a Donor Makes a Documented Promise