LaBelle Corporation owns a $6 million whole life insurance policy on the life of its CEO, naming LaBelle as beneficiary. The annual premiums are $95,000 and are payable at the beginning of each year. The cash surrender value of the policy was $56,000 at the beginning of 2013.
Required:
(1.) Prepare the appropriate 2013 journal entry to record insurance expense and the increase in the investment, assuming the cash surrender value of the policy increased according to the contract to $70,000.
(2.) The CEO died at the end of 2013. Prepare the appropriate journal entry.

Question

Quizplus · Accepted Answer

The Answer of LaBelle Corporation owns a $6 million whole life insurance policy on the life of its CEO, naming LaBelle as beneficiary. The annual premiums are $95,000 and are payable at the beginning of each year. The cash surrender value of the policy was $56,000 at the beginning of 2013.
Required:
(1.) Prepare the appropriate 2013 journal entry to record insurance expense and the increase in the investment, assuming the cash surrender value of the policy increased according to the contract to $70,000.
(2.) The CEO died at the end of 2013. Prepare the appropriate journal entry.

LaBelle Corporation Owns a $6 Million Whole Life Insurance Policy