291 Life Insurance - Cash Value

Assets

Other

Synopsis

Account 291 is established to record the value of the Cash Surrender Value of Life Insurance purchased by the dealership and for which the dealership is the beneficiary.

Debits

Credits

Periodic increase in the cash surrender value of policies

The Cash surrender values of policies terminated
Decreases to the cash surrender value when used to pay premiums

Example 1

Record the annual increase in the cash surrender value of the life insurance policy owned by the dealership in the amount of $635.

Journal: General Journal

Entry:		Debit	Credit
Account 291	Life Insurance – Cash Value	$635
Account 905	Other Income		$635

Example 2

Record the proceeds from a life insurance policy, which the dealership is the owner and beneficiary, in the amount of $75,000, that includes $10,000 of other income.

Journal: Cash Receipts

Entry:		Debit	Credit
Account 201	Cash on Hand	$75,000
Account 291	Life Insurance – Cash Value		$65,000
Account 905	Other Income		$10,000

Comments

A debit balance represents the cash surrender values of life insurance policies owned by the dealership and for which the dealership is the beneficiary.