October 30, 2016 admin

Insurance—Officers’ Life

Expenses

INSURANCE—OFFICERS’ LIFE EXPENSE ACCOUNT
8600

ACCOUNT EXPLANATION
Expense of insurance on the lives of officers of the dealership where the dealership is the beneficiary.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly write-off of prepaid insurance on officer’s life SE
    Insurance—Officers’ Life 8600
      Prepaid Insurance 1510
             
  Monthly increase in cash surrender value SE
    Cash Value of Life Insurance 1820
      Insurance—Officers’ Life 8600
COMMENTS
  • The increase in cash surrender value can be determined from the insurance policy or insurance company.
  • Special treatment of premiums on officers’ life insurance may be required for income tax purposes and dealers should consult tax counsel as necessary.
  • For departmentalization purposes, insurance on the lives of officers should be charged to Unapplied Expenses for allocation across departments. See Departmentalization for further information.