Following Are Four Independent Transactions or Events That Relate to a Voluntary

question 74

Essay

Following are four independent transactions or events that relate to a voluntary health and welfare organization:
1. Cash disbursement of $45,000 was made from the general fund's unrestricted assets for the purchase of new equipment for the organization.
2. The organization receives an unrestricted cash gift of $80,000 from a donor.
3. Common stock investments with a total carrying value of $100,000 were sold by a permanently restricted endowment fund for $112,000 before any dividends were earned on these stocks. The gain is donor-restricted to remain in the permanently restricted fund.
4. General obligation bonds payable with a face amount of $750,000 were sold at par, with the proceeds required to be used solely for construction of a new building. This building was completed at a total cost of $750,000, and the total amount of bond issue proceeds was disbursed toward this cost. Disregard interest capitalization.
Required:
For each of these transactions or events, prepare journal entries specifying the affected funds and showing how these transactions or events should be recorded by the organization.

Realize the relationship between industry experience and business success.

Learn about the common structures of fast-growth companies and the role of partnerships.

Understand the commonality and significance of home-based financial and service-related businesses.

Identify sources of ideas for new businesses.

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Definitions:

Equivalent

Being equal in value, function, or meaning, often used in comparisons or equivalency assessments.

Lease Financing

A method of funding for acquiring assets, where the item is leased rather than purchased outright, often with an option to buy at the end.

Cash Payment

A transaction in which the payment for goods or services is made in cash at the time of purchase.

Debt Financing

A method of funding where a company raises capital through borrowing, typically from institutional sources or by issuing bonds.