A Donor Agrees to Contribute $5,000 Per Year at the End

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization. The donor did not place any use restrictions on the amount pledged. The stream of the payments is discounted at 6 percent. The first payment of $5,000 is received at the end of the first year. The present value factor for a five-payment annuity due on June 30, 20X9, at 6 percent is 4.2124.
Based on the preceding information, the journal entry to recognize present value at the time the pledge is received includes:

A) a credit to Pledges Receivable-Temporarily Restricted for $25,000.
B) a debit to Contributions-Temporarily Restricted for $21,062.
C) a debit to Pledges Receivable-Temporarily Restricted for $21,062.
D) a credit to Contributions-Temporarily Restricted for $25,000.