Reference no: EM133208623
ASE Reynaldo San Mateo, an Angel investor, decided to invest P1,200,000 excess cash in a certificate of deposit on April 1, 2022. The certificate carried an 8% annual rate of interest and a 1-year term to maturity. Principal and interest will be withdrawn at maturity.
1. What amount of income will be recognized for the year ending December 31, 2022?
2. What is the effect of the adjusting entry on the accounting equation?
3. What is the amount of interest receivable as of December 31, 2022?
4. What amount of interest revenue will be recognized in the year 2023?
5. What is amount of interest receivable as of December 31, 2023?
PART 2
Indicate whether assets, liabilities or owner's equity increased, decreased or stayed the same.
1. Paid cash for previous month's utilities.
Increase in assets
Decrease in assets
No change in assets
Increase in liabilities
Decrease in liabilities
No change in liabilities
Increase in equity
Decrease in equity
No change in equity
2. Paid cash for previous month's utilities.
Increase in assets
Decrease in assets
No change in assets
Increase in liabilities
Decrease in liabilities
No change in liabilities
Increase in equity
Decrease in equity
No change in equity
3. Used office supplies on hand.
Increase in assets
Decrease in assets
No change in assets
Increase in liabilities
Decrease in liabilities
No change in liabilities
Increase in equity
Decrease in equity
No change in equity