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. It accounting recognizes a liability, state the account title, the amount.

and the classification of the liability on the balance sheet as either a current liability or a non- current liability.

a. The college issues bonds with a principal amount and issue price of SI 0.000.000. 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 S 1 2.000.000. 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 SI 5.000 per year. Although the college expects tuition to increase each year, any entering student who pays S45.000 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 SI 70.000.

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 SI. 500.000 to enhance undergraduate teaching. The college intends to disburse the funds to faculty members to develop new teaching materials.