Cash Surrender Value of Life Insurance
Response to the following problem:
The Westford Corporation purchases life insurance policies on its officers, and these policies all carry a cash surrender value clause. At the beginning of 2010, Westford paid $13,300 in life insurance premiums for one year. During 2010, the cash surrender value of the policies increased from $98,450 to $103,900. At the beginning of 2011, the corporation's vice president lost his life in an automobile accident. The policy carried on this officer paid $50,000, and the cash surrender value of the policy was $6,480.
Required
Prepare journal entries to record the preceding information on the Westford Corporation's books.