Investment : The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment. Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system. Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses. To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

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Answer 1

Question

Chapter 12, Problem 12.28E

1.

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

2.

To determine

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

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Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO, naming Edible Chemicals as beneficiary. The annual premiums are $70,000 and are payable at the beginning of each year. The cash surrender value of the policy was $21,000 at the beginning of 2021.Required:1. Prepare the appropriate 2021 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 $27,000.2. The CEO died at the end of 2021. Prepare the appropriate journal entry.

Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO, naming EdibleChemicals as beneficiary. The annual premiums are $70,000 and are payable at the beginning of each year. Thecash surrender value of the policy was $21,000 at the beginning of 2018.Required:1. Prepare the appropriate 2018 journal entry to record insurance expense and the increase in the investmentassuming the cash surrender value of the policy increased according to the contract to $27,000.2. The CEO died at the end of 2018. Prepare the appropriate journal entry

Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO, naming Edible Chemicals as beneficiary. The annual premiums are $70,000 and are payable at the beginning of each year. The cash surrender value of the policy was $21,000 at the beginning of 2016. Required: 1. Prepare the appropriate 2016 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 $27,000. 2. The CEO died at the end of 2016. Prepare the appropriate journal entry.

Answer 2

Question

Chapter 12, Problem 12.28E

1.

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

2.

To determine

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

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Answer 3

Question

Chapter 12, Problem 12.28E

1.

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

2.

To determine

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

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Answer 4

Question

Chapter 12, Problem 12.28E

1.

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

2.

To determine

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 12.28E

1.

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

2.

To determine

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

Answer 6

Chapter 12, Problem 12.28E

1.

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

Answer 7

Chapter 12, Problem 12.28E

1.

To determine

Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To Journalize: The insurance expense and increased investment, assuming the cash surrender value of policy increased the value from $21,000 to $27,000 in 2018.

Answer 8

2.

To determine

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

Answer 9

2.

To determine

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - All investments in debt securities are classified...Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5Q Ch. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

Solution Summary: The author explains the rules of debiting and crediting different accounts while they occur in business transactions to abide by the double-entry system.

To Journalize: The disbursement of the insurance amount on the demise of the CEO of Company EC.

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