A Donor Agrees to Contribute $5,000 Per Year at the End

question 58

Multiple Choice

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization.The donor did not place any use restrictions on the amount pledged.The stream of the payments is discounted at 6 percent.The first payment of $5,000 is received at the end of the first year.The present value factor for a five-payment annuity due on June 30,20X9,at 6 percent is 4.2124.The present value factor for a four-payment annuity due on June 30,20X9,at 6 percent is 3.4651.
-Based on the preceding information,the journal entry to recognize present value at the time the pledge is received includes:

• A)a credit to Pledges Receivable-Temporarily Restricted for $25,000.
• B)a debit to Contributions-Temporarily Restricted for $21,062.
• C)a debit to Pledges Receivable-Temporarily Restricted for $21,062.
• D)a credit to Contributions-Temporarily Restricted for $25,000.

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Definitions:

Peripheral

Pertaining to a portion of the nervous system; anything you plug into a computer, for example, a printer, USB flash drive, monitor, or scanner; side vision while looking straight forward.

Interface

The hardware and software that enable individual computers and components to interact.

Modem

A device that modulates and demodulates signals for encoding and decoding digital information over telephone lines.

Consumables

Items or products that are intended to be used up and replaced.