In March, 2017, Elizabeth Rollins transferred $1,000,000 to a nonprofit entity.

Question

In March, 2017, Elizabeth Rollins transferred $1,000,000 to a nonprofit entity. The $1,000,000 was to be used for construction of a wing to its research facility. The contribution was conditional on the nonprofit receiving matching donations from other donors. At December 31, 2017, the nonprofit had secured the necessary matching contributions of $1,000,000. As a result, the nonprofit should make which of the following adjusting journal entries on December 31, 2017?

            A.   Debit Contributions Receivable and credit Contribution Revenue— temporarily Restricted for $1,000,000.

B.   Debit Refundable Advance and credit Contributions Receivable-Unrestricted for $1,000,000.

            C.   Debit Cash and credit Contribution Revenue—Temporarily Restricted for $1,000,000.

D.Debit Refundable Advance and credit Contribution Revenue—Temporarily Restricted for $1,000,000.

Explanation / Answer

Solution:- C.   Debit Cash and credit Contribution Revenue—Temporarily Restricted for $1,000,000.

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