In: Accounting
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.
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) |