Liability recognition and valuation. The transactions below relate to the activities of a local college. Indicate whether or not each of the following transactions immediately gives rise to a liability under GAAP. If accounting recognizes a liability, state the account title and amount.

a. The college issues bonds with a principal amount and issue price of \(\$ 10,000,000\). The college must pay interest at a rate of 7 percent of the principal amount each year and repay the principal in 15 years. The college intends to use the proceeds to construct a new dormitory.

b. The college contracts with a construction company to build the dormitory in part

a. for a contract price of \(\$ 12,000,000\). The college pays \(\$ 2,000,000\) at the time of signing the contract and must pay the remainder as construction progresses. Construction begins next month and should take three years to complete.

c. The college institutes a guaranteed tuition plan for students entering next fall. The tuition for the academic year beginning next fall is \(\$ 15,000\) per year. Although the college expects tuition to increase each year, any entering student who pays \(\$ 45,000\) in advance will receive rights to a four-year undergraduate education without additional tuition payments. The college receives \(\$ 1,800,000\) from students who are entering next fall and who signed up for the guaranteed tuition plan.

d. The college bookstore receives textbooks, for the coming academic year, with an invoice price of \(\$ 170,000\).

e. The college owes employees \(\$ 280,000\) in compensation for the last pay period. The college is also responsible for payment of payroll taxes of 6 percent of compensation.

f. The college receives a grant from the Carnegie Foundation for \(\$ 1,500,000\) to enhance undergraduate teaching. The college intends to disburse the funds to faculty members to develop new teaching materials.