Record the following annuity and life income activities of Private University: 1. On July 1, 2010, R.

Question:

Record the following and life income activities of Private University:
1. On July 1, 2010, R. W. Fields, emeritus professor of accounting, moved out of the state. Fields donated to the university with a cost basis of $30,000 and a fair value of $90,000. Fields is to receive an of $6,000 each year for life; at death, the securities are to be sold and the remaining cash balance is to be transferred to the student loan fund. At a 10% annual rate and a life expectancy of 12 years, the present value of the payments is $34,068.
2. The stock paid $3,400 in dividends each 12-month period.
3. The annuities payable account is adjusted to present value. At year-end, a payment of $6,000 is made to Professor Fields.
4. The annuities payable account is adjusted to present value. A second payment was made a year later.
5. A month later, Professor Fields died, eliminating the liability for future payments.
6. The was sold for $97,000. The cash balance was transferred to the student loan fund.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...