ACTIVITY NO.

4 - JOURNAL ENTRY

UY LAW OFFICE has the following transactions for the month of December 31, 2020. Prepare a
journal entry

December

1 - Atty. Jan Uy invests 500,000 cash to Uy Law Office

- Uy Law office obtains a loan from BDO amounting to 100,000. The loan bears 6% annual
interest payable every anniversary date, starting December 1, 2020. The principal is
payable in two equal annual instalments.
- Uy Law Office pays 10,000 for the necessary permits and licenses for its operation.
- Uy Law Office poays 120,000 for the annual rent of the office space.
- The lease contract will expire on December 1, 2020 and is renewable annually.
2 - Uy Law Office renders a legal advice to Mercury Co. Uy Law Office bills Mercury Co. for
135,000
- Uy Law Office purchases supplies worth 5,000 on cash basis
8 - Uy Law Office renders legal advice to Venus Co for 37,000 on cash basis
- Uy Law Office purchases a laptop for 36,000 cash. The laptop has an estimated useful
life of 3 years, with no residual value. The Company treats purchases during the first
half of the month as a purchase at the start of the month.
15 - Mercury Co. pays Uy Law Office
17 - Atty. Uy withdraws 25,000 from the law office for his personal use.
20 - Cygnus Catering bills Uy Law Office for 25,000 for services rendered for the company’s
holiday luncheon for its clients and staff
22 - Uy Law Office receives 35,000 cash in advance from Jupiter Co for legal services to be
rendered in 2020
23 - Uy Law Office renders legal services to Vega Co. for 55,000, an account.
27 - Uy Law Office renders taxation advice to a client. Uy Law Office bills the client for
20,000.
31 - Uy Law Office pays 15,000 for the salary of its accounting and office staff. Uy Law Office
also pays utilities of 8,000.