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.

ABC Company insured the life of one of its officers. Yearly premium amount to P 75,000. At the end of 2020, cash surrender value of the policies totaled P 200,000. Dividends received by ABC from the insurance company amounted to P 10,000 in 2020. The insurance expense recognized by ABC in 2020 was P 45,000. How much was the cash surrender value of life insurance at the beginning of the year? a. P 230,000 b. P 180,000 c. P 220,000 d. P 170,000

Jennica Company purchased a life insurance policy on its president, of which the entity is the beneficiary. The entity provided the following information for 2022: Cash surrender value - January 1 90,000 Cash surrender value – December 31 110,000 80,000 Annual premium paid on January 1 During 2022, dividend of P5,000 was applied to increase the cash surrender value of the policy. What amount should be reported as life insurance expense for 2022? A. 80,000 В. 60,000 C. 55,000 D. 65,000

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.

Expert Solution & Answer

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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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