Shorecrest Company recently accepted a donation of land with a fair value of $25

Question

Shorecrest Company recently accepted a donation of land with a fair value of $250,000 from the city of Sutton in return for a promise to build a plant in Sutton.

The entry that Shorecrest should use to record this land is:

a. Land.............................. 250,000
Gain from Receipt of Donated Land 250,000 b. Land.............................. 250,000
Donated Capital-Land 250,000 c. Land.............................. 250,000
Retained Earnings................ 250,000 d. Land.............................. 250,000
Unrealized Gain from Receipt of
Donated Land.................. 250,000

Explanation / Answer

Answer is B

The entry that Shorecrest should use to record this land is:

General Journal Debit Credit Land $250,000 Donated Capital-Land $250,000

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