Prepare the entries in the books of Dorina Company

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Question - On July 1, 2017, Dorina Company insured the life of its president for P4,000,000, paying an annual insurance premium of P120,000. 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 increased as follows: Anniversary date Balanced of cash surrender value June 30, 2018 P -0- June 30, 2019 -0- June 30, 2020 36,000 June 30, 2021 49,000 June 30, 2022 62,000 The president died on March 31, 2022.

Required -

(a) Prepare the entries in the books of Dorina Company for years 2018 through 2022. Dorina closes its books on December 31. Use the asset method for the prepayment of insurance premiums.

(b) How would the entries differ if the president or hi heirs were the beneficiaries of the insurance policy?

Reference no: EM132948144

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