The footnote in the financial statements of The Welfare Foundation contains the following note titled "Promises to Give":

Unconditional promises to give were as follows on December 31:

2020

2019

Contributions due in less than one year

$2,293,775

$2,305,753

Contributions due in one to five years

5,454,320

6,272,198

Contributions due in more than five years

1,098,384

1,696,768

8,846,479

10,274,719

Less allowance for bad debts

(166,972)

(398,723)

Less discount to net present value

(497,812)

(710,124)

$8,181,695

$9,165,872

The discount rates used on long-term promises to give were 3 percent in 2020 and 2019.

1. Suppose that the foundation was to prepare the 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, 2020, the foundation collected $ 500,000 of the $1, 098,384 due over a five-year period. Prepare the 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).
3. Another note to the statements indicates that the foundation has made grants to various other organizations. Some of these are payable over a five-year period. Accordingly, it adjusted its grants payable account to take into account the time value of money and applied a discount rate of 3 percent. However, per the note, the grants are classified as Level 3 in accordance with the fair value hierarchy and have been valued using an income approach. What are the different valuation techniques? What is level 3 classification? Explain this in simple words.