Home for the Homeless $($HFTH$)$ is a local charity which had the following transactions during $2023$:

On January $2,$ a donor made a contribution of $$1,000,000$ with the provision that only the interest on the contribution can be used

in any area of the charity's activities and that the principal must not be used. The funds were invested in government of

Canada bonds on January $3.$

On February $1,$ HFTH received unr$$stricted contributions of $$109,000.$

On April $1,$ an anonymous donor donated land with a fair value of $$500,000.$

On August $1$ a donation of $$5,000$ cash was received to fund the purchase of a new commercial dishwasher for the charity.

On August $2$ the charity purchased the dishwasher at a cost of $$6,000.$ The dishwasher has a useful life of $5$ years and no residual

value. The extra $$1,000$ was used from unrestricted contributions.

During a fund$-$raising campaign in November, volunteers spend roughly $700$ hours soliciting donations by telephone calls to

existiing donors. The minimum hourly wage rate in HFTH$\text{'}$s province is $$15\mathrm{.}00$ per hour.

On December $1,2023$ invoices totaling $$27,800$ were received and paid for operating expenses.

The bond investment earned $$55,000$ which was paid to the charity on December $31,2022.$

HFTH has a December $31$ year$-$end.

Required:

Prepare the journal entries and any year$-$end adjustments necessary to record these transactions assuming that the restricted

fund method of accounting for contributions is used and the organization has a general fund, a capital fund and an endowment

fund. $($Indicate which fund is being used for each journal entry.$)(9$ marks$)$

Prepare the journal entries and any year$-$end adjustments necessary to record these transactions assuming that the defral

method of accounting for contributions is used. $(7\mathrm{.}5$ marks$)$

Home for the Homeless is considering doing a fundraising campaign which would involve donors making pledges of

support. What two criteria must be met in order for the charity to recognize these pledges as contribution revenue? Is it likely they

will meet these criteria in the first year of the pledge drive? $(1\mathrm{.}5$ marks$)$