The Executor of Danny Mack's Estate Has Listed the Following

question 66

Essay

The executor of Danny Mack's estate has listed the following properties at fair value: Cash $200,000, Life Insurance Receivable $500,000, Investment in Stocks and Bonds $50,000, Rental Property $100,000, and Personal Property $80,000. Additionally, the executor found $100,000 of various debts incurred before the decedent's death. The cost of Danny Mack's funeral was $20,000.
-Prepare the journal entry to record the payment of the estate's liabilities for debts incurred prior to the decedent's death.

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Definitions:

Purchase Order

An official document issued by a buyer committing to pay the seller for the sale of specific products or services to be delivered in the future.

Obligation Recorded

The accounting process of documenting a liability or duty to pay an amount as a result of a contractual agreement or other legal requirement.

Restricted Fund Method

An accounting method used for reporting restricted funds separately from unrestricted funds in nonprofit organizations' financial statements.

Externally Restricted Fund

Funds designated for a specific purpose by an external party or donor, limiting the fund's use by the receiving organization.