Buana Fide is a local charity which received the following donations during 2020:
 A local radio station donated air time valued at $20,000. If the air time had not been donated, Buana Fide would have purchased it and used it for advertising a fundraising event and silent auction.
 An anonymous donor donated land with a fair value of $50,000 as well as machinery valued at $4,000.
 During a recent fund-raising campaign, volunteers spent roughly 1,000 hours soliciting donations from the public. The minimum hourly wage rate in Buana Fide's main area of operation is $8.00 per hour.
Prepare the necessary journal entries to record these transactions assuming that the deferral method of accounting for contributions is used. Note: if a journal entry is not needed, state your reason.

Question

Siobhan Dawidi · Accepted Answer

Final Answer :  Donation of air-time:  Advertising Expense  $ 20 , 000  Contribution Revenue  $ 20 , 000 \begin{array}{|c|r|c|}\hline 	ext { Advertising Expense }  &  \$ 20,000 \\hline 	ext { Contribution Revenue }  &   &  \$ 20,000 \\hline\end{array}  Advertising Expense   Contribution Revenue  ​ $20 , 000 ​ $20 , 000 ​ ​   Although Buana Fide has the option of reporting or not reporting the donated air time, it is best to report it for budget reasons. Furthermore, it can report the air time as the fair value can be determined, the services would normally be used in the organization's operations, and Buana Fide would have purchased these services had they not been donated.Donation of Land and Machinery:[  Land  $ 50 , 000  Net assets-donated land  $ 50 , 000  Machinery  $ 4 , 000  Deferred Contributions-Capital Assets  $ 4 , 000 \begin{array}{|l|r|r|}\hline 	ext { Land }  &  \$ 50,000 \\hline 	ext { Net assets-donated land }  &   &  \$ 50,000 \\hline 	ext { Machinery }  &  \$ 4,000  &  \\hline 	ext { Deferred Contributions-Capital Assets }  &   &  \$ 4,000 \\hline\end{array}  Land   Net assets-donated land   Machinery   Deferred Contributions-Capital Assets  ​ $50 , 000 $4 , 000 ​ $50 , 000 $4 , 000 ​ ​   Fundraising by volunteers:No entry required.Section 4410 also makes it clear that the fair value of the services of volunteers is normally not recognized due to the difficulty in determining such values.

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