1.

PREPAID EXPENSE- ASSET- TO CONVERT TO EXPENSE OR VICE VERSA

2. ACCRUED EXPENSE-LIABILITY -DEBTOR
3. UNEARNED INCOME LIABILITY TO CONVERT TO INCOME OR VICE VERA
4. ACCRUED INCOME ASSET- CREDITOR

THE COMPANY OBTAINED A LOAN FROM METRO BANK, 600,000 WITH SIX PERCENT ANNUAL INTEREST
ON NOV. 30, 2022, to be paid within 120 days.

GIVE THE ORIGINAL ENTRY ON NOV. 30, 2022

ON THE PART OF THE COMPANY AS DEBTOR

NOV. 30, 2022 CASH……………………………………………………………………………….600,000

LOANS PAYABLE-MB…………………………………………………………….600,000

ON THE PART OF THE BANK AS CREDITOR-

LOANS RECEIVABLE-COMPANY………………………600,000

CASH…………………………………………………………………………600,000

WHAT ITEM IS TO BE RECOGNIZED ON DEC 31, 2022/ INTEREST

DEBTOR – INTEREST EXPENSE- ACCRUED INTEREST EXPENSE-LIABILITY

CREDITOR – INTEREST INCOME – ACCUED INTEREST INCOME- ASSET

WHAT IS YOUR ADJUSTING ENTRY USING prt/

31 days is already consumed 2022

89 days 2023 not yet consumed

Maturity period
DECEMBER 1-31………………..31 DAYS
JANUARY 1-31…………………..31 DAYS
FEB 1-28…………………………...28 DAYS
MARCH 1-30……………………….30 DAYS MATURITY PERIOD
TOTAL……………………………….120 DAYS

MAGKANO B YUNG INTEREST FOR 120 DAYS/

PRT 600,000 X.06 X 31/360= P3,100- FOR 2022

ADJUSTING ENTRY ON DECEMBER 31 TO TAKE UP INTEREST EXPENSE ON THE PART OF THE DEBTOR

DEC. 31, 2022 INEREST EXPENSE……………………….3,100

ACCRUED INTEREST PAYABLE……………………..3,100

ADJUSTING ENTRY TO TAKE UP ACCRUED INTEREST INCOME OF METRO BANK – NO. 4 SA ADJUSTING
ENTRY. RECOGNIZE RECEIVABLE AND INCOME AT THE SAME TIME

DEC. 31 ACCRUED INTEREST INCOME RECEIVABLE……..........3,100 BS

INTEREST INCOME …………………………………………………….…3,100- IS

KAILAN YUNG MATURITY DATE/ MARCH 30 2023- ANO ANG IBIG SABIHIN KAPAY MATURITY DATE NA-
KAILANGAN NG BAYARAN

WHAT IS THE JOURNAL ENTRY ON MARCH 30, 2023/

COMPANY DEBTOR

LOANS PAYABLE…………………………………………………….600,000
INTEREST EXPENSE 600,000 X .06X 89/360……………. 8,900
ACCRUED INTEREST PAYABLE……………………………………3,100
CASH………………………………………………………………………………..612,000
TO RECORD FULL PAYMENT OF BANK LOAN

ANO ANG JOURNAL ENTRY NG MB ON MARCH 30, 2023/

CASH……………………………………………………………………………612,000

LOANS RECEIVABLE…………………………………………………………………..600,000
INTEREST INCOM E………………………………………………………………………...8,900
ACCRUED INTEREST INCOME RECEIVABLE………………………………………3,100

NO. 3 ADJUSTING ENTRY TO ADJUST UNEARNED INCOME – YUNG PERA NATANGGAP PERO HINDI PA
KINIKITA. INCOME ALREADY RECEIVED BUT NOT YET EARNED.

THE COMPANY RECEIVED P1,000,000 TO DELIVER 1,000 PCS OF FINISHED PRODUCT TO THEIR CLIENT. AT
THE END OF THE YEAR ONLY 800 PCS. WERE DELIVERED ON MARCH 1, 2022.

ANO ANG ORIGINAL ENTRY NUNG TUMANGGAP NG P1,000,000

SELLER-COMPANY INCOME METHOD

CASH……………………………………………….1,000,000

SERVICE INCOME ………………………………………..1,000,000

LIABILITY METHOD

CASH………………………………………………….1,000,000

UNEARNED SERVICE INCOME ……………………………1,000,000

ASSIGNMENT ADJUSTING ENTRY USING INCOME AND LIABILITY METHOD

INCOME METHOD:

LIABILITY METHOD: