Account Titles Dr or Cr IS or SFP

1.8% one year bank loan of the Interest Expense Debit IS

company is dated July 15.
Interest Payable Credit SFP
2. Telephone Bill is received from PLDT Utilities Expense Debit IS
Utilities Payable Credit SFP

3. Prepaid insurance has expired Insurance Expense Debit IS

Prepaid Expense Credit SFP
4. Credit Customer is declared Bad Debts Expense Debit IS
insolvent
Accounts Receivable Credit SFP
5. Customer’s 5% one year note is Notes Receivable Debit SFP
dated December 1.
Service Income Credit IS
6. Advance collection from tenant is Cash Debit SFP
already earned. Unearned Service Income Credit SFP

7. Equipment has a life of 10 years Depreciation Expense Debit IS

Accumulated Depreciation Credit SFP

2.

A. Accrued Commission Income P10,000

Commission Receivable P10,000

Commission Income P10,000

B. Accrued Utility Expense of P5,000

Utilities Expense P5,000

Utilities Payable P5,000

C. Bad Debts of P2,000 under the direct- off method

Bad Debts Expense P2,000

Accounts Receivable P2,000

D. Depreciation of Equipment for P3,500

Depreciation Expense P3,500

Accumulate Depreciation P3,500
E. Used supplies for P350 under the asset method from total purchases of P500
 Supplies Expense P350
Supplies P350

F. Earned commission of P2,500 under the liability method if advance collection amounted to P3,000

Cash P2,500
Unearned Commission P2,500

3. Refer to exercise 2

A. How much will be the additional operating expenses? P10,850

B. How much will be the additional revenues? P10,000

4.

A. December 1 for the note received

Note Receivable P900

Service Income P900

B. December 31 for the adjustment to accrued interest for 30 days.

Note Receivable P18,000

Service Income P18,000

5.

Salaries Expense P700

Salaries Payable P700