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Part 2: Presented below are two transactions involving not-for-profit entities who receive contributions intended for...

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Accounting

Part 2: Presented below are two transactions involving not-for-profit entities who receive contributions intended for other not-for-profit entities. Analyze each transaction to determine its appropriate treatment. Prepare the journal entries as required.

a. Bay State University, a private not-for-profit institute of higher learning, established the Bay State Foundation Inc. (OSF), a not-for-profit corporation, to raise funds for the university and to account for and manage the investments of the university. The university and the foundation are financially interrelated.

During the current year, an alumnus donated investments with a fair value of $25,000,000 to the foundation and specified that the earnings from the investments must be used to fund scholarships at Bay State University.

Prepare the journal entry to record the receipt of the donation by Bay State Foundation Inc. and Bay State University. (8 points)

Bay State Foundation Inc.

DATE

ACCOUNT NAMES

DEBIT

CREDIT

Bay State University

DATE

ACCOUNT NAMES

DEBIT

CREDIT

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