Question: Mr Harvey Robinson donated 2 000 000 to the University of Aggiemania

Mr. Harvey Robinson donated $2,000,000 to the University of Aggiemania with the stipulation that earnings of the first 10 years be used to endow professorships in each of the university’s colleges. At the end of the 10-year period the principal of the gift will become available for unrestricted use. The resources were used immediately to purchase investments.

a. Prepare the entry(ies) needed to record the gift, assuming a government university.
b. What effect results from the expiration of the term of the endowment, assuming a government university?

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