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1.31.2022 Adjusting Entries
1.31.2022 Adjusting Entries
Prepare the adjusting entry for XYZ Company under each of the following for the year ending December
31, 2021:
a) Paid P24,000 for 1-year the 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 ABC Company on
October 1, 2021.
c) Paid P160,000 cash to purchase a delivery van (surplus) on Jan. 1. The van was expected to have
a 3-year life and a 6.25% salvage value. Depreciation is computed on a straight-line basis and
begins on the month of purchase.
d) Received an P18,000 cash advance for a contract to provide services in the future. The contract
required a 1-year commitment, starting April 1.
e) Purchased P6,400 of supplies on account. At year’s end, 60% remained in the stockroom.
f) 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.
g) Paid P78,000 cash advance on Sept. 1 for a 1-year lease on office space.