Question

In: Accounting

Please prepare the journal entries and provide explanations. Holiday received $56,000 in municipal bond interest during...

Please prepare the journal entries and provide explanations.

Holiday received $56,000 in municipal bond interest during 2017. Holiday also paid $17,400

in insurance premiums for a life insurance policy for the CEO on which Holiday is the

beneficiary. Holiday also paid $3,000 in insurance premiums on other key executives but

Holiday is not the beneficiary on these policies.

Solutions

Expert Solution

Journal entries:
Date Accounts Titles Debit $ Credit $
a Cash 56000
Interest Revenue 56000
(being municipal bond interest received)
b Insurance expenses 17400
Cash 17400
(being insurance premium for CEO life insu.
and company is beneficiary)
c Insurance expense receivable 3000
Cash 3000
(being insurance premium on executives like and
the company not beneficiary)

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