In 2013, Western Community Hospital, a private facility, receives donated debt securities with a fair market value and face value of $350,000 The donor specifies that the debt securities be held as a permanent endowment, and investment income earned on these securities can be used for any purpose T...

Accounting for Investments a Here the donated securities themselves are the permanent endowment Jour ...

In 2013, Western Community Hospital, a private facility, receives donated debt securities with a fair market value

Question:

In 2013, Western Community Hospital, a private facility, receives donated debt securities with a fair market value and of $350,000. The donor specifies that the debt securities be held as a permanent endowment, and investment income earned on these securities can be used for any purpose. The securities have a fair market value of $320,000 at the end of 2013, and $360,000 at the end of 2014. Interest income earned on the securities is $14,000 in each of the two years.
Required
a. Prepare the journal entries to record the above events in 2013 and 2014. Indicate the balance in each account and its placement in the financial statements.
b. Assume the same facts as above, except the donation was $350,000 in cash, and the hospital invested the $350,000 in debt securities. How do the entries in a. change? Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...