In Jan 2015, Kirkland University receives a pledge of $200,000 to be used exclusively to support research in a specialized area of communication disorders. The university fiscal year ends on July 31. In Dec 2015 (the following fiscal year), Kirkland receives the pledged contribution of $200,000 and spends $150,000 on qualifying research.

1. Prepare all required journal entries to reflect the transactions descried. Indicate the type of fund in which the entries would be made.

A. Assume first that Kirkland is a private not for profit university.

B. Assume instead that Kirkland is a public university and that it elects to be accounted for (i) as a government engaging exclusively in business type activities and (ii) as full service government that accounts for the contribution in a governmental fund.

2. On what grounds if any can you justify different principles of accounting for the same transaction depending on type of institution (public or private) or assumption as to type of public institution?