In 2015, Maine Corporation bought a $5,000,000 life insurance policy on its president, of which Maine Corporation is the beneficiary. Information regarding the policy for the year ended December 31,2020 follows: Cash surrender value, 1/1/2020 : $435,000 Cash surrender value, 12/31/2020 : $540,000 Annual advance premium paid 1/1/2020 : $200,000 During 2020, dividends of $30,000 were applied to increase the cash surrender value of the policy. How much should be the life insurance expense for 2020?
In 2015, Maine Corporation bought a $5,000,000 life insurance policy on its president, of which Maine Corporation is the beneficiary. Information regarding the policy for the year ended December 31,2020 follows: Cash surrender value, 1/1/2020 : $435,000 Cash surrender value, 12/31/2020 : $540,000 Annual advance premium paid 1/1/2020 : $200,000 During 2020, dividends of $30,000 were applied to increase the cash surrender value of the policy. How much should be the life insurance expense for 2020?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 25P
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In 2015, Maine Corporation bought a $5,000,000 life insurance policy on its president, of which Maine Corporation is the beneficiary. Information regarding the policy for the year ended December 31,2020 follows: Cash surrender value, 1/1/2020 : $435,000 Cash surrender value, 12/31/2020 : $540,000 Annual advance premium paid 1/1/2020 : $200,000 During 2020, dividends of $30,000 were applied to increase the cash surrender value of the policy. How much should be the life insurance expense for 2020?
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