Westford Corporation purchases life insurance policies on its officers, and these policies all carry a cash surrender value clause. At the beginning of 2019, Westford paid $13,300 in life insurance premiums for one year. During 2019, the cash surrender value of the policies increased from $98,450 to $103,900. At the beginning of 2020, Westford’s vice president died in an automobile accident. The policy carried on this officer paid $50,000, and the cash surrender value of the policy was $6,480. Required: Prepare journal entries to record the preceding information on Westford’s books.
Westford Corporation purchases life insurance policies on its officers, and these policies all carry a cash surrender value clause. At the beginning of 2019, Westford paid $13,300 in life insurance premiums for one year. During 2019, the cash surrender value of the policies increased from $98,450 to $103,900. At the beginning of 2020, Westford’s vice president died in an automobile accident. The policy carried on this officer paid $50,000, and the cash surrender value of the policy was $6,480. Required: Prepare journal entries to record the preceding information on Westford’s books.
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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Question
Westford Corporation purchases life insurance policies on its officers, and these policies all carry a cash surrender value clause. At the beginning of 2019, Westford paid $13,300 in life insurance premiums for one year. During 2019, the cash surrender value of the policies increased from $98,450 to $103,900. At the beginning of 2020, Westford’s vice president died in an automobile accident. The policy carried on this officer paid $50,000, and the cash surrender value of the policy was $6,480.
Required:
Prepare journal entries to record the preceding information on Westford’s books.
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