At the beginning of 2020, a private NFP organization receives a donation of equipment with a fair value of $1,000,000 and an estimated useful life of 5 years. The controller estimates that there will be no residual value.

1. If the donor puts no restrictions on the donation, what items appear in the 2020 statement of activities related to this donation?

a. Contributions revenue (increases net assets with donor restrictions) $1,000,000; expense (reduces net assets without donor restrictions) $200,000.

b. Contributions revenue (increases net assets without donor restrictions) $1,000,000; expense (reduces net assets without donor restrictions) $200,000.

c. Contributions revenue (increases net assets with donor restrictions) $1,000,000; net assets released from use restrictions (increases net assets without donor restrictions and reduces net assets with donor restrictions) $200,000; expense (reduces net assets without donor restrictions) $200,000.

d. Contributions revenue (increases net assets without donor restrictions) $1,000,000; expense (reduces net assets with donor restrictions) $200,000.