Question - Turnaround Childcare Agency is a private not-for-profit entity providing child care for a fee. The agency has a permanent endowment and the income may be used to sponsor families that are unable to pay for services but the principal must be preserved. In addition, various fundraising activities take place during the year.
When the agency held its annual holiday fundraiser in 2017, pledges of $50,000 were received. The administration expected 5% of the pledges to be uncollectible.
In addition, income of $10,000 was received from the permanent endowment to sponsor children to be placed with foster families.
Prepare the journal entries for these transactions.