DIRECTION: Answer the assignment.

ASSIGNMENT DIRECTION: Use the problem to answer the requirements Slovenia Company insured the life of its president for P2,000,000, the entity being the beneficiary of an ordinary life insurance policy. The annual premium is P80,000 and the policy is dated January 1, 2011. The cash surrender values are P15,000 on December 31, 2013 and P19,000 on December 31, 2014. The entity follows the calendar year as the fiscal period. The president died on October 1, 2014 and the policy is settled on December 31, 2014. Required: 1. What is the gain on life insurance settlement? 2. What is the life insurance expense for 2014? 3. Prepare the journal entries if possible