In 2021, Waverly Corp

Multiple Choice

In 2021, Waverly Corp. set up a new manufacturing facility in Nova Scotia. To encourage Waverly to set up its factory, the province provided equipment with a fair value of $250,000 and an estimated useful life of 15 years using straight-line depreciation. What journal entry would be required to record the equipment contribution in fiscal 2021, using the gross method?

A) A credit to donation revenue of $250,000.
B) A credit to other comprehensive income - donated assets of $250,000.
C) A credit to deferred income of $250,000.
D) A credit to property, plant and equipment for $250,000.