Question
Following are several unrelated transactions involving a hospital. 1 . The hospital has a contractual agreement with a lender requiring that $500,000 in cash be
Following are several unrelated transactions involving a hospital. 1
. The hospital has a contractual agreement with a lender requiring that $500,000 in cash be set aside to meet its future debt payment.
2. The hospital accrued $1,500,000 in patient service revenues. Charity services of $415,000 were also provided. Contractual adjustments total $535,000.
3. An increase of $45,000 was recorded for bad debts.
4. General services of $100,000 were donated by technicians. Normally, the hospital would have purchased these specialized services.
5. An endowment contribution of $1,500,000 was received.
6. Investments held by the hospital increased in fair value by $32,000.
7. The hospital purchased $837,000 in equipment with resources that had been contributed in prior years for such a purchase.
a. Prepare journal entries to record the foregoing transactions, assuming the hospital is a not-for-profit facility.
b. Prepare journal entries to record the foregoing transactions, assuming the hospital is a business-type government facility.
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