EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Suggested General Ledger Accounting Entries
PERIOD: 07/01/2012 through 07/31/2012
LIFE INSURANCE EXPENSE
CASH SURRENDER VALUE INCREASE
0.00
16,917.30
DUE FROM INSURED (SPLIT DOLLAR) (1)
0.00
COMPENSATION EXPENSE
0.00
INTEREST EXPENSE (POLICY LOANS) (2)
0.00
CASH
OTHER INCOME (INSURANCE)
LIFE INSURANCE POLICY LOANS (3)
NOTE:
0.00
16,917.30
0.00
To record the insurance activity on life insurance policies owned by the employer and the associated expense or income based on the
increase in the cash surrender values or the receipt of insurance policy proceeds.
(1)
A "due from account" is an Account Receivable.
(2)
To record policy loan interest accrued or paid during the current period. IMPORTANT: IRC Section 264 provides for certain restrictions on
the tax deductibility of policy loan interest.
(3)
To record the accrual of life insurance policy loans and policy loan interest during the current period. If the loan is to be repaid within twelve
months, it may be classified as a current liability. The obligation may be treated as a non-current liability if the loan will be liquidated by
deduction from the proceeds of the policy upon maturity or cancellation (AICPA formerly ARB Number 43).
ACTION REQUIRED:
(i)
POST ENTRIES TO THE GENERAL LEDGER.
(ii)
SEE INDIVIDUAL INSURANCE POLICY SCHEDULE FOR ENTRIES FOR EACH INSURED.
[Suggested entries are based on the period identified above. Entries may include dividends, interest, or investment performance which are not
guaranteed and will vary. Policy values should be confirmed by the insurance carrier on or after the end of the fiscal year.]
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Suggested General Ledger Accounting Entries by Policy
PERIOD: 07/01/2012 through 07/31/2012
(DR)
Life
Insurance
Expense
(DR)
Cash
Surrender
Value
Increase
(DR)
Due
From
Insured
(Split $)(1)
(CR)
(CR)
Compensation
Expense
(DR)
Interest
Expense
(Policy
Loans)(2)
Cash
Other
Income
(Insurance)
(CR)
Life
Insurance
Policy
Loans(3)
0.00
0.00
1,691.73
1,691.73
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,691.73
1,691.73
0.00
0.00
Lincoln National Life Ins Co
XYZ136
Banker, Billy
XYZ133
Executive, Jane
XYZ132
Executive, Joe
0.00
0.00
0.00
1,691.73
1,691.73
1,691.73
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,691.73
1,691.73
1,691.73
0.00
0.00
0.00
MassMutual
XYZ123
Executive, Eddie
0.00
1,691.73
0.00
0.00
0.00
0.00
1,691.73
0.00
New York Life
XYZ134
XYZ135
XYZ124
Director, Annie
Director, David
Executive, Eddie
0.00
0.00
0.00
1,691.73
1,691.73
1,691.73
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,691.73
1,691.73
1,691.73
0.00
0.00
0.00
Northwestern Mutual
XYZ125
Executive, Eddie
0.00
1,691.73
0.00
0.00
0.00
0.00
1,691.73
0.00
Total:
0.00
16,917.30
0.00
0.00
0.00
0.00
16,917.30
0.00
Policy Number
Insured
Guardian Life
XYZ131
XYZ130
Banker, Jane
Banker, Joe
(DR)
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Suggested General Ledger Accounting Entries by Policy
PERIOD: 07/01/2012 through 07/31/2012
(DR)
Policy Number
Insured
Life
Insurance
Expense
(DR)
Cash
Surrender
Value
Increase
(DR)
Due
From
Insured
(Split $)(1)
(DR)
Compensation
Expense
(DR)
Interest
Expense
(Policy
Loans)(2)
(CR)
(CR)
Cash
Other
Income
(Insurance)
(CR)
Life
Insurance
Policy
Loans(3)
NOTE: To record the insurance activity on life insurance policies owned by the employer and the associated expense or income based on the increase in the cash surrender values or the receipt of
insurance policy proceeds.
(1)
A "due from account" is an Account Receivable.
(2)
To record policy loan interest accrued or paid during the current period. IMPORTANT: IRC Section 264 provides for certain restrictions on the tax deductibility of policy loan interest.
(3)
To record the accrual of life insurance policy loans and policy loan interest during the current period. If the loan is to be repaid within twelve months, it may be classified as a current liability. The
obligation may be treated as a non-current liability if the loan will be liquidated by deduction from the proceeds of the policy upon maturity or cancellation (AICPA formerly ARB Number 43).
ACTION REQUIRED:
(i)
POST ENTRIES TO THE GENERAL LEDGER.
(ii)
SEE INDIVIDUAL INSURANCE POLICY SCHEDULE FOR ENTRIES FOR EACH INSURED.
[Suggested entries are based on the period identified above. Entries may include dividends, interest, or investment performance which is not guaranteed and will vary. Policy values should be
confirmed by the insurance carrier on or after the end of the fiscal year.]
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Policy Values Report by Carrier
PERIOD: 07/01/2012 through 07/31/2012
Insurance Carrier
Death Benefit
CSV
06/30/2012
CSV
07/31/2012
Increase In
Surrender
Value
Prior Period
Increase
Annualized
Net Yield
Pre-Tax
Equivalent
2
3
1
1
2,390,816.30
3,586,224.45
1,195,408.15
1,195,408.15
966,702.92
1,450,054.38
483,351.46
483,351.46
970,086.38
1,455,129.57
485,043.19
485,043.19
3,383.46
5,075.19
1,691.73
1,691.73
3,371.66
5,057.49
1,685.83
1,685.83
4.20%
4.20%
4.20%
4.20%
6.36%
6.36%
6.36%
6.36%
7
8,367,857.05
3,383,460.22
3,395,302.33
11,842.11
11,800.81
4.20%
6.36%
3
3,586,224.45
1,450,054.38
1,455,129.57
5,075.19
5,057.49
4.20%
6.36%
3
3,586,224.45
1,450,054.38
1,455,129.57
5,075.19
5,057.49
4.20%
6.36%
10
11,954,081.50
4,833,514.60
4,850,431.90
16,917.30
16,858.30
4.20%
6.36%
Number of
Policies
General Account
Guardian Life
Lincoln National Life Ins Co
MassMutual
Northwestern Mutual
General Account Total:
Hybrid Account
New York Life
Hybrid Account Total:
Total:
Tax Rate: 34.00%
NOTE: A policy's Annualized Net Yield is based on a rate of return of the policy's Cash Surrender Value from the end of the previous period to the end of the current period. Yields may be
distorted if any policy events or transactions occur during the current period.
Annualized Net Yield = (Exp ( ( 365 / Num of days in current period ) * Ln (cash value/(prior cash value + premiums paid in current period))) - 1 ) * 100
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Policy Values Report by Policy
PERIOD: 07/01/2012 through 07/31/2012
Death Benefit
CSV
06/30/2012
CSV
07/31/2012
Increase In
Surrender
Value
Prior Period
Increase
Annualized
Net Yield
Pre-Tax
Equivalent
XYZ131
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
XYZ130
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
2,390,816.30
966,702.92
970,086.38
3,383.46
3,371.66
4.20%
6.36%
Policy
Number
Banker, Jane
Banker, Joe
Insurance Carrier / Insured
General Account
Guardian Life
Subtotal:
Lincoln National Life Ins Co
Banker, Billy
XYZ136
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
Executive, Jane
XYZ133
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
Executive, Joe
XYZ132
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
3,586,224.45
1,450,054.38
1,455,129.57
5,075.19
5,057.49
4.20%
6.36%
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
8,367,857.05
3,383,460.22
3,395,302.33
11,842.11
11,800.81
4.20%
6.36%
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
Subtotal:
MassMutual
Executive, Eddie
XYZ123
Subtotal:
Northwestern Mutual
Executive, Eddie
XYZ125
Subtotal:
General Account Total:
Hybrid Account
New York Life
Director, Annie
XYZ134
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Policy Values Report by Policy
PERIOD: 07/01/2012 through 07/31/2012
Death Benefit
CSV
06/30/2012
CSV
07/31/2012
Increase In
Surrender
Value
Prior Period
Increase
Annualized
Net Yield
Pre-Tax
Equivalent
XYZ135
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
XYZ124
1,195,408.15
483,351.46
485,043.19
1,691.73
1,685.83
4.20%
6.36%
3,586,224.45
1,450,054.38
1,455,129.57
5,075.19
5,057.49
4.20%
6.36%
3,586,224.45
1,450,054.38
1,455,129.57
5,075.19
5,057.49
4.20%
6.36%
Insurance Carrier / Insured
Policy
Number
Director, David
Executive, Eddie
Subtotal:
Hybrid Account Total:
Tax Rate: 34.00%
NOTE: A policy's Annualized Net Yield is based on a rate of return of the policy's Cash Surrender Value from the end of the previous period to the end of the current period. Yields may
be distorted if any policy events or transactions occur during the current period.
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Year-to-Date Policy Values Report by Carrier
PERIOD: 07/01/2012 through 07/31/2012
Number of
Policies
CSV
12/31/2011
CSV
07/31/2012
Increase In
Surrender
Value
General Account
Guardian Life
Lincoln National Life Ins Co
MassMutual
Northwestern Mutual
2
3
1
1
946,648.54
1,419,972.81
473,324.27
473,324.27
970,086.38
1,455,129.57
485,043.19
485,043.19
23,437.84
35,156.76
11,718.92
11,718.92
4.30%
4.30%
4.30%
4.30%
6.52%
6.52%
6.52%
6.52%
General Account Total:
7
3,313,269.89
3,395,302.33
82,032.44
4.30%
6.52%
Hybrid Account
New York Life
3
1,419,972.81
1,455,129.57
35,156.76
4.30%
6.52%
Hybrid Account Total:
3
1,419,972.81
1,455,129.57
35,156.76
4.30%
6.52%
10
4,733,242.70
4,850,431.90
117,189.20
4.30%
6.52%
Insurance Carrier / Insured
Total:
------- Year-to-Date -----Net
Pre-Tax
Yield
Equivalent
Tax Rate: 34.00%
NOTE: A policy's Annualized Net Yield is based on a rate of return of the policy's Cash Surrender Value from the end of the previous period to the end of the current period. Yields may be
distorted if any policy events or transactions occur during the current period.
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Year-to-Date Policy Values Report by Policy
PERIOD: 07/01/2012 through 07/31/2012
Insurance Carrier / Insured
General Account
Guardian Life
Banker, Jane
Banker, Joe
Policy
Number
Issue
Date
CSV
12/31/2011
CSV
07/31/2012
Increase In
Surrender
Value
XYZ131
XYZ130
10/01/2010
10/01/2010
473,324.27
473,324.27
485,043.19
485,043.19
11,718.92
11,718.92
4.30%
4.30%
6.52%
6.52%
946,648.54
970,086.38
23,437.84
4.30%
6.52%
473,324.27
473,324.27
473,324.27
485,043.19
485,043.19
485,043.19
11,718.92
11,718.92
11,718.92
4.30%
4.30%
4.30%
6.52%
6.52%
6.52%
1,419,972.81
1,455,129.57
35,156.76
4.30%
6.52%
473,324.27
485,043.19
11,718.92
4.30%
6.52%
473,324.27
485,043.19
11,718.92
4.30%
6.52%
473,324.27
485,043.19
11,718.92
4.30%
6.52%
473,324.27
485,043.19
11,718.92
4.30%
6.52%
3,313,269.89
3,395,302.33
82,032.44
4.30%
6.52%
473,324.27
473,324.27
473,324.27
485,043.19
485,043.19
485,043.19
11,718.92
11,718.92
11,718.92
4.30%
4.30%
4.30%
6.52%
6.52%
6.52%
1,419,972.81
1,455,129.57
35,156.76
4.30%
6.52%
Subtotal:
Lincoln National Life Ins Co
Banker, Billy
Executive, Jane
Executive, Joe
XYZ136
XYZ133
XYZ132
10/01/2010
10/01/2010
10/01/2010
Subtotal:
MassMutual
Executive, Eddie
XYZ123
01/01/2005
Subtotal:
Northwestern Mutual
Executive, Eddie
XYZ125
01/01/2005
Subtotal:
General Account Total:
Hybrid Account
New York Life
Director, Annie
Director, David
Executive, Eddie
Subtotal:
XYZ134
XYZ135
XYZ124
10/01/2010
10/01/2010
01/01/2005
----- Year-to-Date ---Net
Pre-Tax
Yield Equivalent
-- Since Inception -Net
Pre-Tax
Yield Equivalent
4.28%
4.28%
6.48%
6.48%
4.28%
4.28%
4.28%
6.48%
6.48%
6.48%
4.39%
6.65%
4.39%
6.65%
4.28%
4.28%
4.39%
6.48%
6.48%
6.65%
EMPLOYER: Sample Client
PLAN: Bank Owned Life Insurance & Split Dollar Program
REPORT: Year-to-Date Policy Values Report by Policy
PERIOD: 07/01/2012 through 07/31/2012
Insurance Carrier / Insured
Hybrid Account Total:
Policy
Number
Issue
Date
CSV
12/31/2011
CSV
07/31/2012
Increase In
Surrender
Value
1,419,972.81
1,455,129.57
35,156.76
----- Year-to-Date ---Net
Pre-Tax
Yield Equivalent
4.30%
-- Since Inception -Net
Pre-Tax
Yield Equivalent
6.52%
Tax Rate: 34.00%
NOTE: A policy's Annualized Net Yield is based on a rate of return of the policy's Cash Surrender Value from the end of the previous period to the end of the current period. Yields may be
distorted if any policy events or transactions occur during the current period.