It is only within the past few years that life insurance has become so closely connected with real estate as to warrant its mention in a work such as this. They sometimes, however, come into contact at two points: first, in connection with time sales, and second, in connection with loans.

The simplest example of insurance in connection with time sales is afforded by the transactions of those development companies which offer to sell lots under an agreement that the purchaser is required to pay "no interest, no taxes," and that, should the purchaser die during the life of the contract, the property will be conveyed to his estate free of all encumbrances.

Possibly some of these companies may effect insurance on the lives of its purchasers on a plan similar to what is known as "industrial insurance," or some special form of policy under which the liability and the premiums diminish year by year as the liability insured against decreases, this form probably being the most economical policy obtainable. In such cases, all premiums paid by the concern should be charged to the expense of the particular subdivision, and be charged against Profit and Loss at the closing of the books.

It is, however, a more general custom for the concern to carry this insurance itself; that is, to run the risks, and, if a purchaser die, to give a deed of conveyance to his estate. In these cases the best practice is to close the account of such a contract by a journal entry in the following general form:

Life Insurance ..........................

$......

To Contracts .............................

$......

To close Contract No. 121, John Doe, deceased, conveyance of lot ...., blk....., being made to his estate.

This entails the opening of a Life Insurance account in the general ledger, to which all such accounts are charged, showing in each case the subdivision concerned; and, on the closing of the books, the balance of the account is closed into Profit and Loss. This is clearer than carrying it as an item in any general expense account, and far preferable.