In June 2016, the wealthy parents of a college sophomore pledge to donate $1.5
million to the college she attends, making payments of $0.5 million at the end of each of her remaining years at the school until her expected graduation in 2019. The college applies a discount rate of 3 percent. At that rate, the present value of $1 for three periods is $2.82861.
REQUIRED:
What entry, if any, would be required to recognize the pledge? What entry(ies), if any, would be required to record the receipt of the first $0.5 million at the end of year 2016? Assume that the college uses separate funds to track restricted resources and indicate in which fund each entry is made.

Question

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The Answer of In June 2016, the wealthy parents of a college sophomore pledge to donate $1.5
million to the college she attends, making payments of $0.5 million at the end of each of her remaining years at the school until her expected graduation in 2019. The college applies a discount rate of 3 percent. At that rate, the present value of $1 for three periods is $2.82861.
REQUIRED:
What entry, if any, would be required to recognize the pledge? What entry(ies), if any, would be required to record the receipt of the first $0.5 million at the end of year 2016? Assume that the college uses separate funds to track restricted resources and indicate in which fund each entry is made.

In June 2016, the Wealthy Parents of a College Sophomore