Question

Prepare the adjusting entry for each of the following for year ended December 31, 2018.

1. Paid Lifetime Insurance Co. P98,000 one year car insurance to commence August 1, 2018. The amount of premium was debited to Insurance Expense.
2. Borrowed P1,000,000 from Bank issuing a one-year note with 12% annual interest on April 30, 2018.
3. Bought P100,000 equipment with five-year estimated life and a salvage value of P10,000. Depreciation is computed on a straight line basis.
4. Received P410,000 cash advance from a customer for one year services to be rendered starting June 30, 2018. The amount was credited to Service Income.
5. Purchased P71,000 supplies at the beginning of the year. Supplies remaining at the end of the year amounted to P29,000. Use the expense method.
6. Accounts receivable has a balance of P1,300,000. It is estimated that P50,000 of this is uncollectible.
7. Received P630,000 cash advance from a customer for one year services to be rendered starting June 1, 2018. The amount was credited to Unearned service income.
8. Paid one year rent in the amount of P1,800,000 to commence September 1, 2018. The amount of paid was debited to Prepaid rent.
9. Accounts receivable has a balance of P50,000. It is estimated that 5%of this is uncollectible . Allowance for doubtful accounts has a balance of P1,500.
10. Purchases P71,000 supplies at the beginning of the year. Supplies remaining at the end of year amounted to P29,000. Use the asset method.

Answer 1

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