Ella ltd is non profit organization and the following transactions were recorded;
- Ella received a $5,000 cheque from Hot FM to be used on urgent issues
- Ella received a $10,000 donation from the Girls guide for a homework assistance project starting in 2 months
- Ella received a $25,000 endowment contribution from Prof Ade for a scholarship fund.
- Ella received a donation of 50 student desks for its homework assistance project from City Office Supplies Ltd. The desks are valued at $10,000 and are expected to last 10 years.
- City of Edmonton donated $30,000 worth of land to Ella ltd
- Assume that the homework assistance program is underway. The $10,000 donation (#2) has been spent on materials and a part-time instructor.
- Assume that at the end of the year, the endowment contribution in part (3) earned $500 in interest. Prof Ade had specified that interest must be spent on future scholarships. Ella ltd will wait until there is at least $2,000 in accumulated interest before distributing any scholarship
- At the end of the year, Ella records depreciation on the desks, using the straight-line method.
Prepare journal entries for above transaction using deferral and restricted fund method
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