You are required to prepare the adjusting journal entries without explanations.
You are given the following selected transactions of Bobby merchandising for the year ended December 31, 2020. You are required to prepare the
a. Supplies on hand account is shown in the books with a balance of P450. An actual count shows only P150 worth of supplies are still on hand.
b. Interest of P60 was debited to Prepaid Interest account for interest paid in advance on a 60-day-6% note dated December 16.
c. Salaries of P850 remain unpaid as at the end of the year.
d. Office equipment was bought for P50,000 on May 31 of the current year. It is expected to be useful for only 7 years and have a salvage value of P8,000.
e. Commission Income account which is shown in the books at P1,000 is only ¾ earned.
f. A bill for P2,000 for services rendered to a client has not been collected.
g. It is expected that only 95% of outstanding accounts receivable of P20,000 will be collectible.
h. Unearned Rental Income account which is shown in the books at P6,000 is already 75% earned.
i. Received a 90-day 18% note for P9,500 from a client for services rendered on October 31. No interest has been recorded on the note.
j. Advertising Expense account of P500 represents payment for the cost of advertisement to appear in five monthly issues of the Bulo beginning with October of the current year.
Use the following account titles:
Accounts Receivable
Prepaid Advertising
Accumulated Depreciation
Prepaid Interest
Advertising Expense
Rental Income
Allowance for Bad Debts
Salaries Expense
Bad Debts Expense
Salaries Payable
Cash Service Income
Commission Income
Supplies Expense
Depreciation Expense
Supplies on Hand
Interest Expense
Unearned Commission Income
Interest Income
Unearned Rental Income
Interest Receivable
Utilities Expense
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