Hi,
My company owned a Plane that was listed among the companies assets. The plane crashed and killed the majority owner as well as his wife. The company will be receiving multiple insurance proceeds. One for the plane itself, and others for the owner's Key Man Life policy.
How do I record these payments from the insurance companies, along with the loss of the Plane (Asset & Depreciation)?
Thank you.
Wow, sorry to hear that. That is not the typical post you see in this forum.
To remove the plane, create a journal entry:
| Debit | Credit | |
| Accumulated Depreciation - Plane (to zero account) | XXX | |
| Cash (proceeds from insurance for the plane only) | XXX | |
| Plane - Fixed Asset (to zero account) | XXX | |
| Gain or loss from insurance proceeds (to balance - loss if debit, gain if credit) |
As far as the life insurance proceeds, you can create an 'Other income' account called "Life Insurance Proceeds" or something similar and assign that account to the deposit. Life insurance proceeds are not taxable income and putting them under Other income will help to differentiate that on your P&L.
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