On January 1,2016 , Coke Company insured the life of its president for P4,000,000, with an annual premium of P120,000 payable in advance at the beginning of each year. The company is the designated beneficiary and has the right to cancel the policy at its own option The cash surrender value of the policy at the end of each policy year is as follows: Cash surrender value 2016 - 0 2017 - 0 2018 - 36,000 2019 - 49,000 2020 - 62,000 The president died on October 1, 2020. Coke Company's accounting year is the calendar year. How much is the life insurance expense for the year ended December 31, 2020? a. P120,000 b. P107,000 c. P 90,000 d. P 80,250

On January 1,2016 , Coke Company insured the life of its president for P4,000,000, with an annual premium of P120,000 payable in advance at the beginning of each year. The company is the designated beneficiary and has the right to cancel the policy at its own option The cash surrender value of the policy at the end of each policy year is as follows: Cash surrender value 2016 - 0 2017 - 0 2018 - 36,000 2019 - 49,000 2020 - 62,000 The president died on October 1, 2020. Coke Company's accounting year is the calendar year. How much is the life insurance expense for the year ended December 31, 2020? a. P120,000 b. P107,000 c. P 90,000 d. P 80,250

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000
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