Quadra Corp. insured its president on January 1, 2017, with a $2,000,000 life insurance policy. The annual premium was $60,000 payable on January 1 of each year. Cash surrender values increased each year by 5% of the premium paid. Dividends received in the first year 2017) amounted to $2,000 and increased by 10% each year, accruable at year-end only.
Required:
a. Compute insurance expense for 2018.
b. Prepare journal entries for July 1, 2019, when the president died.

Question

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The Answer of Quadra Corp. insured its president on January 1, 2017, with a $2,000,000 life insurance policy. The annual premium was $60,000 payable on January 1 of each year. Cash surrender values increased each year by 5% of the premium paid. Dividends received in the first year 2017) amounted to $2,000 and increased by 10% each year, accruable at year-end only.
Required:
a. Compute insurance expense for 2018.
b. Prepare journal entries for July 1, 2019, when the president died.