1. Prepare the journal entry for the following transaction: As a general rule, t

Question

1.Prepare the journal entry for the following transaction: As a general rule, the organization estimates 10% of all pledges will not be received. A donor made an unconditional pledge to the organization for $500,000 to be used for research in the current period. The organization starts research immediately and spends $25,000 in the first month.

DR________________________________________________________________    $_________

                CR________________________________________________________________    $_________

                CR________________________________________________________________    $_________

DR________________________________________________________________    $_________

                CR________________________________________________________________    $_________

DR________________________________________________________________    $_________

                CR________________________________________________________________    $_________

Explanation / Answer

a) Pledge receivables $500,000

estimated uncollectables pledges(500,000*10%) $50,000

contribution revenue $450,000

b) Research expense $25,000

contribution revenue $25,000

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