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Prepare the adjusting entry for 4x4 Enterprise under each of the ff. for the year ending December 31, 2022: a. Paid P24,000 for a 1-year fire insurance policy to commence on September 1. The amount of premium was debited to Prepaid Insurance. b. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Maybank on October 1, 2022. c. Paid P160,000 cash to purchase a delivery van (surplus) on January 1, 2022. The van was expected to have a 3-year life and a P10,000 salvage value. Depreciation is computed on a straight-line basis. d. Received a P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1. e. Purchase P6,400 of supplies on account. At year's end, P750 of supplies remained on hand. f. Prene Invested P90,000 cash in a certificate of deposit that paid 4% annual interest. The certificate was acquired on May 1 and carried a 1-year term to maturity. Paid P78.000 cash in advance on September 1 for a 1-year lease on office space.

Prepare the adjusting entry for 4x4 Enterprise under each of the ff. for the year ending December 31, 2022: a. Paid P24,000 for a 1-year fire insurance policy to commence on September 1. The amount of premium was debited to Prepaid Insurance. b. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Maybank on October 1, 2022. c. Paid P160,000 cash to purchase a delivery van (surplus) on January 1, 2022. The van was expected to have a 3-year life and a P10,000 salvage value. Depreciation is computed on a straight-line basis. d. Received a P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1. e. Purchase P6,400 of supplies on account. At year's end, P750 of supplies remained on hand. f. Prene Invested P90,000 cash in a certificate of deposit that paid 4% annual interest. The certificate was acquired on May 1 and carried a 1-year term to maturity. Paid P78.000 cash in advance on September 1 for a 1-year lease on office space.

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter4: Income Measurement And Accrual Accounting
Section: Chapter Questions
Problem 4.10E
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Using Liability Method
Prepare the adjusting entry for 4x4 Enterprise under each of the ff. for the year ending December 31, 2022: a. Paid P24,000 for a 1-year fire insurance policy to commence on September 1. The amount of premium was debited to Prepaid Insurance. b. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Maybank on October 1, 2022. c. Paid P160,000 cash to purchase a delivery van (surplus) on January 1, 2022. The van was expected to have a 3-year life and a P10,000 salvage value. Depreciation is computed on a straight-line basis. d. Received a P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1. e. Purchase P6,400 of supplies on account. At year's end, P750 of supplies remained on hand. f. Prens Invested P90,000 cash in a certificate of deposit that paid 4% annual interest. The certificate was acquired on May 1 and carried a 1-year term to maturity. Paid P78.000 cash in advance on September 1 for a 1-year lease on office space.
Transcribed Image Text:Prepare the adjusting entry for 4x4 Enterprise under each of the ff. for the year ending December 31, 2022: a. Paid P24,000 for a 1-year fire insurance policy to commence on September 1. The amount of premium was debited to Prepaid Insurance. b. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Maybank on October 1, 2022. c. Paid P160,000 cash to purchase a delivery van (surplus) on January 1, 2022. The van was expected to have a 3-year life and a P10,000 salvage value. Depreciation is computed on a straight-line basis. d. Received a P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1. e. Purchase P6,400 of supplies on account. At year's end, P750 of supplies remained on hand. f. Prens Invested P90,000 cash in a certificate of deposit that paid 4% annual interest. The certificate was acquired on May 1 and carried a 1-year term to maturity. Paid P78.000 cash in advance on September 1 for a 1-year lease on office space.
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