The for-profit entity sells $120,000 with net 30-day terms, while the nonprofit entity has a fund raising drive for which they receive pledges of $120,000. How do the two journal entries look?

The for-profit entity will record a journal entry for the sale of goods or services. This entry would include a debit to the Accounts Receivable account in the amount of $120,000 and a credit to Sales Revenue in the same amount. Additionally, since this is being done on net 30-day terms, there should be an accrual entry made to recognize any interest that might be earned as part of this transaction.

For the non-profit entity, they will need to record pledges received as revenue. This involves debiting Pledges Received and crediting Revenue accounts such as Unrestricted Net Assets or Temporarily Restricted Net Assets depending on how these funds are intended to be used. Since this is not an actual exchange of money yet, it would not involve any additional entries but instead just a recognition of the potential future income stream.

Overall, both entities need to make separate journal entries when recording transactions; while there may be some similarities between them due to their nature (i.e., sales versus pledges), they are still two distinct strategies that require unique accounting treatment.