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Cash Surrender Value of Life Insurance On January 1, 2018, Kehoe Corporation insured the lives of its president, vice president, controller, and treasurer for $100,000 each. The annual premium on each policy is $4,200, payable on January 1 of each year, and the cash surrender values for the policies increase by 4% of the annual premiums paid. Premium payments were made on the scheduled date by Kehoe through 2020, and the following dividends were received at the end of the year on each policy: 2018, $450; 2019, $575; 2020, $550. On February 1, 2021, the treasurer died and Kehoe collected the face value of his policy plus 11 months’ premium. Required: Prepare journal entries to record the preceding information for the years 2018 through 2021. Round calculations to the nearest dollar.

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 13, Problem 25P
Textbook Problem

Cash Surrender Value of Life Insurance On January 1, 2018, Kehoe Corporation insured the lives of its president, vice president, controller, and treasurer for $100,000 each. The annual premium on each policy is $4,200, payable on January 1 of each year, and the cash surrender values for the policies increase by 4% of the annual premiums paid. Premium payments were made on the scheduled date by Kehoe through 2020, and the following dividends were received at the end of the year on each policy: 2018, $450; 2019, $575; 2020, $550. On February 1, 2021, the treasurer died and Kehoe collected the face value of his policy plus 11 months’ premium.

Required:

Prepare journal entries to record the preceding information for the years 2018 through 2021. Round calculations to the nearest dollar.

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Chapter 13 Solutions

Intermediate Accounting: Reporting And Analysis
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