The footnote in the financial statements of The Welfare Foundation contain the following note titled " Promises to Give": Unconditional promises to give were as follows at December 31:

The discount rates used on long-term promises to give were 3 percent in 20Xl and 20X0.
1. Suppose that the foundation were to prepare a statement of financial position in columnar form, one column for net assets without donor restrictions, and another for net assets with donor restrictions. In which column would these receivables be reported? Explain.
2. Suppose that on December 31, 20Xl, the foundation collected $500,000 of the $1,098,384 due over a 5-year period. Prepare appropriate journal entries to record the collection of the $500,000 and to adjust the remaining balance in the receivables account. Be sure to recognize interest on the balance of the contributions due in over five years and one to five years (less the discount).

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Contributions due in less than one year Contributions due in one to five years Contributions due in more than five years Less allowance for bad debts Less discount to net present value 20X1 20X0 $2,293,775 $2,305,753 5,454,320 6,272,198 1,098,384 1,696,768 8,846,479 10,274,719 (166,972) (398,723) (497,812) (710,124) $8,181,695 $9,165,872