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in the form of a $2,500,000 grant. Of this sum, the foundation designated $1,000,000 for building and equipment and $750,000 for the establishment of a

image text in transcribedimage text in transcribed in the form of a $2,500,000 grant. Of this sum, the foundation designated $1,000,000 for building and equipment and $750,000 for the establishment of a special program for counseling parolees. The following transactions occurred during 2023 : $60,000 were received, collectible within the next year. These promises are unrestricted and expected to be 85 percent collectible. Bad debt expense is included with administrative expenses. 2. Out-of-pocket operating expenses for the year were $1,400,000. Of the total, $950,000 are program expenses, $350,000 are administrative expenses, and the remainder are fund-raising expenses. $100,000 of the expenses were unpaid at year-end. 5. Interest of $140,000 was accrued and paid on the mortgage and note, all allocated to administrative expenses. 6. Depreciation on the building and equipment is $190,000, all allocated to program expenses. a. Prepare journal entries to record the transactions for 2023 . \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ General Journal } \\ \hline Ref. & Description & Debit & Credit \\ \hline & Restricted cash & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & Contributions revenue - unrestricted & 0 & 0 \\ \hline & To record receipt of initial resources provided by a private foundation. & & \\ \hline 1 & Cash & 0 & 0 \\ \hline & Restricted cash & 0 & 0 \\ \hline & Administrative expense & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & Contributions revenue - unrestricted & 0 & 0 \\ \hline & Contributions revenue - restricted & 0 & 0 \\ \hline & To record contributions and promises. & & \\ \hline 2 & & 0 & 0 \\ \hline & Administrative expenses & 0 & 0 \\ \hline & Fund-raising expenses & 0 & 0 \\ \hline & Accounts payable & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & To record out-of-pocket operating expenses. & & \\ \hline 3 & & 0 & 0 \\ \hline & Cash & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & To record the investment income. & & \\ \hline 4 & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & To record reclassification of net assets. & & \\ \hline & & 0 & 0 \\ \hline & Note payable & 0 & 0 \\ \hline & Restricted cash & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & To record purchase of building. & & \\ \hline 5 & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & To record payment of accrued interest on mortgage and note. & & \\ \hline 6 & & 0 & 0 \\ \hline & & 0 & 0 \\ \hline & To record depreciation on building and equipment. & & \\ \hline \end{tabular}

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