Dogwood State University is a government university that reports as a special government engaged only in business-type activities. Listed below are selected transactions that affect its annuity gifts. All amounts are in thousands of dollars.
Transactions:
1. At the beginning of the year, the college receives cash of $200 with a stipulation that the donor be paid $25 each year for 10 years. The present value of the payments to the donor is $175.
2. Investments in the amount of $170 are purchased.
3. Investment income of $20 is earned and received during the year.
4. Payment of $25 is made to the donor at year end.
5. The present value of the expected payments to the donor was $162 at year end.
$\underline{\text{ Requirement: }}$ Prepare the necessary journal entries to record these transactions.

Question

Dogwood State University is a government university that reports as a special government engaged only in business-type activities. Listed below are selected transactions that affect its annuity gifts. All amounts are in thousands of dollars.
Transactions:
1. At the beginning of the year, the college receives cash of $200 with a stipulation that the donor be paid $25 each year for 10 years. The present value of the payments to the donor is $175.
2. Investments in the amount of $170 are purchased.
3. Investment income of $20 is earned and received during the year. 
4. Payment of $25 is made to the donor at year end.
5. The present value of the expected payments to the donor was $162 at year end.
$\underline{\text{ Requirement:  }}$  Prepare the necessary journal entries to record these transactions.

Quizplus · Accepted Answer

The Answer of Dogwood State University is a government university that reports as a special government engaged only in business-type activities. Listed below are selected transactions that affect its annuity gifts. All amounts are in thousands of dollars.
Transactions:
1. At the beginning of the year, the college receives cash of $200 with a stipulation that the donor be paid $25 each year for 10 years. The present value of the payments to the donor is $175.
2. Investments in the amount of $170 are purchased.
3. Investment income of $20 is earned and received during the year. 
4. Payment of $25 is made to the donor at year end.
5. The present value of the expected payments to the donor was $162 at year end.
$\underline{\text{ Requirement:  }}$  Prepare the necessary journal entries to record these transactions.

Dogwood State University Is a Government University That Reports as a Special