Jimmy Olson died on June 15, 2013, at the age of 75, after a brief illness. Jimmy is survived by his wife, Lois, and two adult sons, Clark and Kent. Jimmy left a valid will, requesting that Clark serve as executor of his estate. Jimmy's widow will maintain the family residence, which was owned jointly.
Jimmy's will provided the following specific devises:
2012 Corvette to his son, Clark..........................................$35,000
Summer cottage on Lake Michigan to his son Kent....................40,000
Stock investments to be shared equally between his two sons......400,000
Miscellaneous personal effects to his widow, Lois ........................-
Jimmy's will also provided the following general devises of cash:
Clark-to cover executor's services .....................................$5,000
Ms. Lana Lang, Jimmy's personal trainer .............................200,000
Jimmy's church ............................................................50,000
The local symphony orchestra ............................................50,000
Jimmy's will further provides that Lois should receive any excess of income over expenses during the administration of his estate. All remaining assets are to be placed in a trust to support Lois for the remainder of her lifetime. Upon Lois's death, the remainder of the estate is to be divided equally between Clark and Kent.
Clark filed notice of his appointment as executor on June 25 and placed the required notice to potential creditors in The Daily Planet, the local newspaper. Clark prepared and filed the following estate inventory with the probate court on July 15:
Jimmy Olson, Testator
Inventory of Estate Assets
As of the date of Death on June 15, 2013
Submitted by Clark Olson, executor, on July 15
Property Description Fair Value
Cash checking and savings accounts in Metropolis National Bank......................$750,000
Certificate of deposit (6 percent, 36 months, matures December 31)
(includes $5,000 accrued interest)..............................................................505,000
Stocks held by Perry White brokerage ........................................................460,000
Dividends receivable on stocks ..................................................................12,000
Lake Michigan cottage ...........................................................................40,000
2005 Corvette ......................................................................................35,000
Personal effects* .......................................................................................-
...................................................................................................$1,802,000
The following events occurred during June and July 2013:
June 22 Received a check in the amount of $15,000, representing interest on the certificates of deposit, including the amount accrued at the date of death.
June 24 Received a dividend check in the amount of $12,000.
June 30 Paid $250 to repair a roof leak on the Lake Michigan cottage.
July 4 Paid $4,900 in funeral expenses for Jimmy.
July 12 Cashed out the certificate of deposit for $501,300. The additional $1,300 represented interest income from June 23 through July 12. The bank waived the fees for early withdrawal because Jimmy had been a loyal, long-term customer.
July 15 Filed the estate inventory with the probate court.
July 20 Distributed the general property devises as provided in Jimmy's will.
July 21 Distributed the general cash devises as provided in Jimmy's will.
July 22 Closed the accounts, finalizing the estate administration, paid remaining estate income to Lois, and transferred remaining estate assets to Lois Olson testamentary income trust.
REQUIRED
1. Prepare journal entries for the transactions related to the estate during 2013.
2. Prepare entries to terminate the estate and transfer remaining assets to the trust.
3. Prepare the final charge-discharge statement for the estate of Jimmy Olson for the period June 15, 2013 through July 22, 2013.