A Donor Agrees to Contribute $5,000 Per Year at the End

question 58

Multiple Choice

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization.The donor did not place any use restrictions on the amount pledged.The stream of the payments is discounted at 6 percent.The first payment of $5,000 is received at the end of the first year.The present value factor for a five-payment annuity due on June 30,20X9,at 6 percent is 4.2124.The present value factor for a four-payment annuity due on June 30,20X9,at 6 percent is 3.4651.
-Based on the preceding information,the journal entry to recognize present value at the time the pledge is received includes:

• A)a credit to Pledges Receivable-Temporarily Restricted for $25,000.
• B)a debit to Contributions-Temporarily Restricted for $21,062.
• C)a debit to Pledges Receivable-Temporarily Restricted for $21,062.
• D)a credit to Contributions-Temporarily Restricted for $25,000.

---

Definitions:

Predicate Term

A term that expresses a property that can be attributed to a subject in a logical proposition.

Distributed Propositions

Statements in categorical logic where the term being discussed applies to all members of the category without exception.

Missing Premise

A logical condition where an argument seems incomplete because it lacks an unstated premise necessary to support the conclusion.

Valid Syllogism

A logical argument in which, if the premises are true, the conclusion must necessarily be true.