Question: The following events occurred as part of the operations of

The following events occurred as part of the operations of Kronke Private University for the year 2018 (all amounts are in 000’s):
a. To construct a new business building, the university floated at par a $20,000,000, 8% serial bond issued on July 1. Interest is to be paid on December 31 and June 30. In addition, contributions from the community specifically for the new building totaled $5,000,000.
b. Payments for construction to date total $7,000,000.
c. Interest payments are made on December 31.
d. Construction of the building is completed at an additional cost of $18,000,000. Payment is made for $16,000,000; the balance will be paid in one year under a retained percentage agreement. Institutional policy is to release donor restrictions when assets are placed in service.
e. The first bond serial payment of $2,000,000 plus interest is paid on December 31.
f. A gift of land and a building was received, appraised at $200,000 and $350,000, respectively. The gift was made on the condition that the university assumes a $90,000 mortgage on the property. The university assumed the mortgage.
g. Pledges with a present value of $200,000 to be paid over the next five years were received. The funds will be restricted for remodeling the building received in item (f). It is estimated that $20,000 of the pledges will not be collected.
h. A donation of $500,000 of stock was made by a wealthy citizen. The stock cannot be sold for five years. After the 5-year period, the stock can be sold, and any proceeds are to be used to finance campus construction projects.
i. Dividends of $10,000 on the stock in item (h) were received and were also restricted for construction projects.
j. Depreciation on the building received in item (f) totaled $25,000.
1. Prepare journal entries to record these events for Kronke Private University. Assume that fund accounting is not used.
2. Prepare a statement of activities for the period ended June 30, 2018.

  • CreatedApril 13, 2015
  • Files Included
Post your question