The water and wastewater utility (enterprise) funds of threecities each paid $1 millions in casualty insurance permiums. City Ais insured by a small independent insurance company. City B isself-insured and accounts for its insurance activities in aninternal service fund. City C is self-insured and accounts for itsinsurance activites in its general fund. Each of the insurerscollected a total of $10M in premiums from all of the parties thatit insures, including the city utility funds. Of this amount, eachpaid out $8 millions in actual claims. The balance was held inresersve for major catastrophes.
Prepare the journal entry that each of the three utility fundsshould make to record its insurance payment and expense for theyear. Comment on any differences.