Which entry to record the receipt of the donation includes

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Reference no: EM132817642

GROVEL Co. received donation of equipment from CRAWL, Inc., an unrelated foreign corporation. The equipment has a fair value of ?4,000,000. Necessary costs incurred by GROVEL Co. to bring the asset to its intended condition for use amounted to ?40,000.

Problem 1: The entry to record the receipt of the donation includes

a. a credit to share premium of ?4,040,000

b. a credit to share premium of ?3,960,000

c. a credit to income from donation of ?4,040,000

d. a credit to income from donation of ?3,960,000

Problem 2: Assuming the donor is a shareholder of GROVEL Co., the entry to record the receipt of the donation includes

a. a credit to share premium of ?4,040,000

b. a credit to share premium of ?3,960,000

c. a credit to income from donation of ?4,040,000

d. a credit to income from donation of ?3,960,000

Reference no: EM132817642

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