Moore Art Association, a not-for-profit entity, received a series of pledges in January of Year One (the beginning of its fiscal year) totaling $10 million. The organization adheres to FASB Statement No. 116 guidelines related to pledge revenue and receivable recognition. Further, Moore is a mature entity with ample historical experience related to the collectability of pledges.

Based upon this experience, Moores CFO believes that 70% of the year one pledges will be collected within the first year. She estimates that Moore will be able to collect 70% of year one the pledges by year end and that 20% of the remaining pledges will not be collectible in year two.

Using the information regarding Moore Art Association, related to the amount of year one pledges which are not expected to be collected within year one: What amount should the CFO recognize in January of year one as a credit to "Revenues from contributions" from this second pledge revenue stream and in what type of fund?

$600,000 in an Unrestricted Fund

$3,000,000 in a Restricted Fund

$2,400,000 in a Restricted Fund

No entry is required until the pledges are actually collected