P23-6 Estate accounting Tom Josephson dies on May 16, 2015, leaving a valid will. The will reads as follows:

I leave my automobile to my niece, Pat. I leave my stock investment accounts to my niece, Sue. I leave income on my estate to the local humane society. Estate expenses are to be paid from principal, not from estate income. All remaining property is to be placed in a trust for my two children, Megan and Ryan. I name my niece, Prima, as executrix of my estate, for which she should be paid a fee of $2,500.

Prima prepares an estate inventory for all assets discovered and files the appropriate notice to potential creditors on May 31. Prima excludes the personal residence, furnishings, and bank accounts from the inventory, as these were jointly owned by Tom and his wife, Corinne.

Tom Josephson, Testator Inventory of Estate Assets As of May 16, 2015 Assets * Fair Value Dividends receivable on stocks $1,200 Interest receivable on bonds 6,750 Life insurance—payable to the estate 750,000 2014 Volkswagen 2,600 Investments in stocks 52,000 Investments in bonds 400,000

$1,212,550

*The probate court allowed exclusion of Tom’s personal effects.

The following transactions occurred during May and June:

June 5 Prima discovers government bonds with a face value of $200,000 in Tom’s safe deposit box. The box also contains an additional life insurance policy in the amount of $50,000.

June 15 Prima receives a check from the life insurance company for $750,000.

June 16 A check for $8,000 in bond interest is received.

June 18 Prima pays funeral expenses of $4,300.

June 22 Prima cashes in the government bonds for $215,000, which includes accrued interest at the date of death. The bonds matured several years earlier and were no longer accruing interest.

June 23 Prima receives a check from the insurance company on the subsequently discovered policy for $50,000.

June 24 Prima pays $18,250 to settle all liabilities of the estate, including property taxes and Tom’s medical bills.

June 28 A check for $1,600 in stock dividends is received.

June 30 Prima makes all remaining payments (including her fee as executrix) and property transfers and closes the estate.

R E Q u I R E D : Prepare all journal entries required to account for the estate of Tom Josephson. You may ignore taxes.