E13.5 Reporting Promises

At the beginning of 2020, the Museum of History receives a documented

promise to contribute $20,000 at the end of each year for the next four years. The appropriate discount

rate is 3 percent, and the promise is considered fully collectible. At the end of 2020, the museum receives

the first payment.

Required: Prepare journal entries to record the promise and the first years contribution. If the museums net assets

are affected, indicate the appropriate category of net assets.