Question 1 Charity Inc received $50,000 in government grants that will go towards the purchase of new playground equipment. The equipment costs $70,000 which was paid for by the government grant plus $20,000 of cash in bank on the first day of the fiscal year. The equipment has a useful life of 10 years and no residual value. Charity Inc. uses the straight-line method. a Required: Explain to the Charity's Executive Director how the playground equipment purchase and government grant will be recorded and the rationale behind the deferral method. (Show your journal entries)