Chapter 1 Problem 13-12
2008
Jan. 1 Life insurance 80,000
Cash 80,000
2009
Jan. 1 Life insurance 80,000
Cash 80,000
Dec. 31 Cash 5,000
Life insurance 5,000
31 Cash surrender value 42,000
Life insurance (42,000 x 1/3) 14,000
Retained earnings 28,000
2010
Jan. 1 Life insurance 80,000
Cash 80,000
Dec. 31 Cash 6,000
Life insurance 6,000
31 Cash surrender value 5,000
Life insurance 5,000
Balance – December 31, 2010 47,000
Balance – December 31, 2009 42,000
Increase in cash surrender value 5,000
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