Professional Documents
Culture Documents
1. BUGS Company established a sinking fund on January 1, 2018 for the retirement of
a bond issue. The following transactions occurred:
Prepare the journal entry to record the transaction on January 18, 2018.
Dr. Sinking fund securities - 2,500,000; Cr. Sinking fund cash - 2,500,000
Prepare the journal entry to record the transaction on February 12, 2019. NE
Prepare the journal entry to record the transaction on December 31, 2019a.
Dr. Sinking fund cash - 270,000; Cr. Sinking fund income - 270,000
Prepare the journal entry to record the transaction on December 31, 2019b.
Dr. Sinking fund cash - 2,250,000; Cr. Sinking fund securities - 1,900,000; Cr. Gain
on sale of sinking fund securities – 350,000
Prepare the journal entry to record the transaction on December 31, 2019c.
Dr. Bonds Payable - 3,000,000; Cr. Sinking fund cash - 3,000,000
Prepare the journal entry to record the transaction on December 31, 2019d.
Dr. Cash - 300,000; Cr. Sinking fund cash - 300,000;
On January 1, 2018, Jack Company adopted a plan to accumulate funds for a new
plant building to be erected beginning January 1, 2023 at an estimated cost of
P9,000,000.
The entity is contemplating on how to accumulate the fund and is choosing the
following alternatives:
1) Contribute to the fund annually beginning January 1, 2018, and every January 1
thereafter. The fund will earn 8% interest compounded annually.
2) Contribute to the fund annually beginning December 31, 2018, and every December
31 thereafter. The fund will earn 8% interest compounded annually.
3) Contribute a one-time contribution on January 1, 2018. The fund will earn 8%
interest compounded annually.
Note: The first letter of the account title should be capital, the rest should be small.
If asked to prepare journal entry for a specific date, but no entry is necessary, answer
NE.
Please refer to the image below for the questions or requirements on this section.
Prepare the journal entry to record annual payment of the insurance premium.
Dr. Life insurance expense - 90,000; Cr. Cash - 90,000
Prepare the journal entry to take up the adjustments on December 31, 2018.
Dr. Prepaid life insurance - 67,500; Cr. Life insurance expense - 67,500
Prepare the journal entry on September 30, 2021 for the initial recognition of the cash
surrender value
Dr. Cash - 6,000; Cr. Life insurance expense - 6,000
Prepare the journal entry on December 31, 2021 to record the receipt of dividends.
Dr. Cash surrender value – 9,000; Cr. Life insurance expense - 9,000
Prepare the journal entry on December 31, 2021 to adjust the cash surrender value.
Dr. Cash surrender value – 27,000; Cr. Life insurance expense – 27,000
Determine the amount of life insurance expense that will be presented in the 2020
income statement
87,000
Determine the amount of life insurance expense that will be presented in the 2021
income statement
52,500
Determine the amount of cash surrender value that will be presented in the 2021
financial statements.
99,000
Determine the amount of cash surrender value that will be presented in the 2022
financial statements.
138,000
Determine the amount of life insurance expense that will be presented in the 2023
financial statements.
7,000
How much is the gain on life insurance settlement that will be reported in the 2023
financial statements?
2,801,500