nica Company purchased a life insurance policy on vided the following information for 2022: h surrender value – January 1 h surrender value – December 31 ual premium paid on January 1 ing 2022, dividend of P5,000 was applied to increa reported as life insurance expense for 2022? 80,000 60,000 55,000

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 25E
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Jennica Company purchased a life insurance policy on its president, of which the entity is the beneficiary. The entity
provided the following information for 2022:
Cash surrender value - January 1
90,000
Cash surrender value – December 31
110,000
80,000
Annual premium paid on January 1
During 2022, dividend of P5,000 was applied to increase the cash surrender value of the policy. What amount should
be reported as life insurance expense for 2022?
A. 80,000
В. 60,000
C. 55,000
D. 65,000
Transcribed Image Text:Jennica Company purchased a life insurance policy on its president, of which the entity is the beneficiary. The entity provided the following information for 2022: Cash surrender value - January 1 90,000 Cash surrender value – December 31 110,000 80,000 Annual premium paid on January 1 During 2022, dividend of P5,000 was applied to increase the cash surrender value of the policy. What amount should be reported as life insurance expense for 2022? A. 80,000 В. 60,000 C. 55,000 D. 65,000
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