Sharon transfers to Russ a life insurance policy with a cash surrender value of $30,000 and a face value of $100,000 in exchange for real estate. Russ continues to pay the premiums on the policy until Sharon dies 7 years later. At that time, Russ has paid $14,000 in premiums, and he collects the $100,000 face value. How much of the proceeds, if any, are taxable to Russ?

Required prepare the necessary adjusting entries in the general journal as of december 31, assuming the following: on september 1, the company entered into a prepaid equipment maintenance contract. birch company paid $3,400 to cover maintenance service for six months, beginning september 1. the payment was debited to prepaid maintenance. supplies on hand at december 31 are $3,900. unearned commission fees at december 31 are $7,000. commission fees earned but not yet billed at december 31 are $3,500. (note: debit fees receivable.) birch company's lease calls for rent of $1,600 per month payable on the first of each month, plus an annual amount equal to 1% of annual commissions earned. this additional rent is payable on january 10 of the following year. (note: be sure to use the adjusted amount of commissions earned in computing the additional rent.)