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 2015 and 2014.
1. Suppose that the foundation were to prepare a statement of financial position in columnar form, one column for unrestricted net assets, another for temporarily restricted net assets, and a third for permanently restricted net assets. In which column would these receivables be reported? Explain.
2. Suppose that on December 31, 2015, the foundation collected $ 500,000 of the $1, 098,384 due over a five-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).
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.

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2015 2014 $2,293,775 5,454,320 1,098,384 8,846,479 (166,972) (497.812) $8,181,695 Contributions due in less than one vear Contributions due in one to five vears Contributions due in more than five years $2,305.75:3 6,272,198 1,696,768 10,274,719 (398,723) 710.124) Less allowance for bad debts Less discount to net present value