The accounting for a grant depends on its purpose.
Mississippi Delta State University received a $300,000 government grant to be used to finance a study to determine the effects of the federal stimulus bill on the regional economy. During 2011, expenditures of $75,000 were incurred and paid on the research project.
1. Record these transactions in the accounts of Mississippi Delta University, and explain how the effects of the transactions should be reported in the college's financial statements.