Charity A and Charity B are affiliated entities. An accountant for Charity B is paid $10,000 per month, which is equal to the fair value of the services rendered. Charity A loses its accountant and the accountant from Charity B is sent to work with Charity A for two months. Charity A pays nothing for this service. What entry should Charity A record for this work? No entry is made. An asset is debited for $20,000 and contributed support is credited for the same amount. An expense is debited for $20,000 and contributed support is credited for the same amount. An asset is debited for $20,000 and an inter-equity account is credited for the same amount.
Charity A and Charity B are affiliated entities. An accountant for Charity B is paid $10,000 per month, which is equal to the fair value of the services rendered. Charity A loses its accountant and the accountant from Charity B is sent to work with Charity A for two months. Charity A pays nothing for this service. What entry should Charity A record for this work? No entry is made. An asset is debited for $20,000 and contributed support is credited for the same amount. An expense is debited for $20,000 and contributed support is credited for the same amount. An asset is debited for $20,000 and an inter-equity account is credited for the same amount.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Charity A and Charity B are affiliated entities. An accountant for Charity B is paid $10,000 per month, which is equal to the fair value of the services rendered. Charity A loses its accountant and the accountant from Charity B is sent to work with Charity A for two months. Charity A pays nothing for this service. What entry should Charity A record for this work?
- No entry is made.
- An asset is debited for $20,000 and contributed support is credited for the same amount.
- An expense is debited for $20,000 and contributed support is credited for the same amount.
- An asset is debited for $20,000 and an inter-equity account is credited for the same amount.
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