In December 2016, a Donor to a College Established a Trust

question 62

Short Answer

In December 2016, a donor to a college established a trust in which college receives $ 500,000 to be invested. The college receives $ 4,000 of the income per year until the donor dies. At that point, the assets revert to the donor's estate. The college estimates that the present value of the anticipated receipts from the trust amount to $ 120,000. How should this $ 120,000 be recorded in 2016, assuming

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Definitions:

Criterion Variables

The dependent variables in an experiment or study that are affected by other variables and are used to evaluate outcomes.

Predictor Variable

Variable in a correlational research study used to predict a criterion variable.

Correlation Coefficient

A numerical measure that quantifies the degree to which two variables are linearly related, ranging from -1 to 1.

Independent Variable

Variable manipulated by the researcher.