Reference no: EM133171541

Question - Prepare the adjusting entries required by the following information made available to you on December 31, 2018, the end of the accounting period

a. On Dec. 31, two notes are on hand:

-P15,000 for 60 days dated Dec. 16, 2018 at 14% was received from a customer

-P18,000, 90days, issued on Dec. 1, 2018 at 18% interest

b. The Prepaid Insurance account balance of P23,000 represents premium paid on a two-year insurance policy taken on Dec. 1, 2017. The expired portion for the year 2017 has already been adjusted.

c. The business has Accounts Receivable of P14,500 as at the end of 2018. It is estimated that only 90% of this is collectible. Allowance for Doubtful Accounts has an unadjusted balance of P750.

d. A six-month advertising contract was entered into by the business which required an advance payment of P2,400 on Nov. 2, 2018 and was debited to Advertising Expense.

e. Rent Income was credited for P18,000 representing three months rent received from a lessee on Oct. 15, 2018.

f. Office Equipment costing P75,000 was purchased on Oct. 1, 2018 and estimated to have a useful life of five years after which it could be sold for P5,000.

g. Supplies Expense has a balance of P9,500 representing supplies purchased during the year of which only P4,500 has been taken out from the stockroom.