Vacation City Was Awarded a $500,000 Federal Operating Grant for Use

Multiple Choice

Vacation City was awarded a $500,000 federal operating grant for use in Year 2. On December 1 of year 1,half of the grant money was received by the City.The journal entry to record receipt of the grant funds will include:

A) A credit to Revenues in the amount of $250,000.
B) A credit to Deferred Inflow of Resources- Grant Proceeds in the amount of $250,000.
C) A debit to Grant Expenditures in the amount of $250,000.
D) No journal entry will be made until expenditures are made in Year 2.