Health care, multiple choice. Select the best answer for each of the following multiple-choice items dealing with hospitals.
On March 1, 20X8, A. C. Rowe established a $100,000 endowment fund, the income from which is to be paid to Elm Hospital for general operating purposes. Elm does not control the fund’s principal. Rowe appointed West National Bank as trustee of this fund. What journal entry is required by Elm to record the establishment of the endowment?
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a Cash |
100,000 |
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Nonexpendable Endowment Fund |
100,000 |
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b Cash |
100,000 |
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Nonoperating Revenue |
100,000 |
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c Nonexpendable Endowment Fund |
100,000 |
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Endowment Fund Balance |
100,000 |
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d A memorandum entry only |