On January 1, 2013, Pauline Doyle gave Rocky Mountain College $400,000 in cash with the provision that

Question:

On January 1, 2013, Pauline Doyle gave Rocky Mountain College $400,000 in cash with the provision that the cash be invested in income-producing securities. Actuarial estimates set Doyle's life expectancy at 15 years from the date of the gift. The annual is 4 percent. Rocky Mountain College invested the $400,000 in securities earning 5 percent in cash dividends in 2013.
Required
Record all 2013 events relating to Pauline Doyle's gift, under each of the following independent arrangements.
a. The college is to pay Pauline Doyle $14,000 every December 31 of her remaining life. Upon Doyle's death, remaining resources become available to the college with no restrictions as to use.
b. The college is to pay Pauline Doyle all earnings of the principal for life. Upon Doyle's death, remaining resources become available to the college with no restrictions as to use? Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...