by Charlie
(NH)
Our church is going through mold remediation. Our total restricted earmarked funds are currently at $65,000.
I know how to handle restricted funds. I know how to handle capital expenditures. What I can’t figure out is how to account for them on the books when I need to add it to Fixed Assets. Example: chairs purchased for $10,000.
Normally, the receiving of the restricted fund would debit cash and credit restricted fund. Then the expenditure would debit restricted fund and credit cash. You keep a running total of what is left of the restricted fund on the balance sheet.
However, for a capital asset expenditure (the chairs)…to correctly account for it, I have to debit fixed asset account and credit cash.
But this does not decrease the restricted fund. The only way I can decrease restricted funds is to make a journal entry to debit restricted fund and credit Donations Revenue (which shows an increase on the P&L).
I am not sure this is correct. Has anyone run into this before?
