On December 1,20X1,Wilson Contributed $25,000 to the Women's Shelter,stipulating That

question 10

Multiple Choice

On December 1,20X1,Wilson contributed $25,000 to The Women's Shelter,stipulating that his contribution be used to buy a commercial refrigerator and freezer system.The system was purchased on January 2,20X3.The shelter will depreciate the refrigerator over 5 years using the straight-line method.The shelter has a December 31 year-end and uses the deferral method.At December 31,20X3,the shelter records a journal entry to record depreciation and should also make the following journal entry.

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Definitions:

Fair Value Hedge

A hedge of the exposure to changes in fair value of a recognized asset or liability or an identified portion of such an asset or liability that is attributable to a particular risk.

Cash Flow Hedge

A hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecast transaction.

Exposure Hedge

A financial strategy utilized to minimize the risk associated with exposure to adverse movements in foreign exchange rates, interest rates, or commodity prices.

Debt Extinguishment

The process of discharging or settling a debt, either through repayment or through a financial restructuring agreement.