In 20x0, Chain, Inc. purchased a P1,000,000 life insurance policy on its president, of which Chain is the beneficiary. Information regarding the policy for the year ended December 31, 20x5 follows: Cash surrender value, 1/1/x5 - 87,000 Cash surrender value, 12/31/x5 - 108,000 Annual Avance Premium Paid 1/1/x5
In 20x0, Chain, Inc. purchased a P1,000,000 life insurance policy on its president, of which Chain is the beneficiary. Information regarding the policy for the year ended December 31, 20x5 follows: Cash surrender value, 1/1/x5 - 87,000 Cash surrender value, 12/31/x5 - 108,000 Annual Avance Premium Paid 1/1/x5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 20x0, Chain, Inc. purchased a P1,000,000 life insurance policy on its president, of which Chain is the beneficiary. Information regarding the policy for the year ended December 31, 20x5 follows:
Cash surrender value, 1/1/x5 - 87,000
Cash surrender value, 12/31/x5 - 108,000
Annual Avance Premium Paid 1/1/x5 - 40,000
During 20x5, dividends of P6,000 were applied to increase the cash surrender value of the policy. What amount should Chain report as life insurance expense for 20x5?
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