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  • Bookkeeping Case Problem

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    Novelyn Gamboa
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    The document contains 6 case problems providing adjusting journal entries for various accounts at the end of an accounting period: 1) For interest receivable on a loan, debiting accrued interest receivable and crediting interest income. 2) For interest payable on a loan, debiting interest expense and crediting accrued interest payable. 3) For unearned insurance revenue using the liability method, debiting unearned revenue and crediting insurance revenue. 4) For prepaid insurance using the asset method, debiting insurance expense and crediting prepaid insurance. 5) For supplies expense when using the prepaid supplies account, debiting supplies expense and crediting prepaid supplies.

    Original Description:

    Original Title

    BOOKKEEPING CASE PROBLEM

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    The document contains 6 case problems providing adjusting journal entries for various accounts at the end of an accounting period: 1) For interest receivable on a loan, debiting accrued interest receivable and crediting interest income. 2) For interest payable on a loan, debiting interest expense and crediting accrued interest payable. 3) For unearned insurance revenue using the liability method, debiting unearned revenue and crediting insurance revenue. 4) For prepaid insurance using the asset method, debiting insurance expense and crediting prepaid insurance. 5) For supplies expense when using the prepaid supplies account, debiting supplies expense and crediting prepaid supplies.

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    © All Rights Reserved
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    5 views2 pages

    Bookkeeping Case Problem

    Uploaded by

    Novelyn Gamboa
    The document contains 6 case problems providing adjusting journal entries for various accounts at the end of an accounting period: 1) For interest receivable on a loan, debiting accrued interest receivable and crediting interest income. 2) For interest payable on a loan, debiting interest expense and crediting accrued interest payable. 3) For unearned insurance revenue using the liability method, debiting unearned revenue and crediting insurance revenue. 4) For prepaid insurance using the asset method, debiting insurance expense and crediting prepaid insurance. 5) For supplies expense when using the prepaid supplies account, debiting supplies expense and crediting prepaid supplies.

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    © All Rights Reserved
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    of 2

    CASE PROBLEM:

    1) X Company lent a 12% P200,000.00 loan to Y Company on December 01, 2019. The principal and
    interest thereon are expected to be collected on November 30, 2020. What would be adjusting entry of X
    Company at the end of December 31, 2019?

    Date Account Title/Explanation Debit Credit


    Dec.31, 2019 Accrued Interest Receivable P2,000.00
    Interest Income P2,000.00

    2) X Company borrowed a 12% P200,000.00 loan from Y Company on December 01, 2019. The principal
    and interest thereon are expected to be collected on November 30, 2020. What would be adjusting entry
    of X Company at the end of December 31, 2019?

    Date Account Title/Explanation Debit Credit


    Dec.31, 2019 Interest Expense 2,000.00
    Accrued Interest Payable 2,000.00

    3) X Company received an annual insurance premium of P12,000.00 from Y Company beginning


    November 01, 2018. Assuming X Company prepares monthly financial statements at the end of each
    calendar month and it uses liability method in recording the annual insurance premium, what would be
    the adjusting entry of X Company at the end of March 31, 2019?

    Date Account Title/Explanation Debit Credit


    March 31, 2019 Unearned Revenue 1,000.00
    Insurance Revenue 1,000.00

    4) X Company paid an annual insurance premium of P12,000.00 from Y Company beginning November
    01, 2018. Assuming X Company prepares monthly financial statements at the end of each calendar
    month and it uses asset method in recording the annual insurance premium, what would be the
    adjusting entry of X Company at the end of March 31, 2019?

    Date Account Title/Explanation Debit Credit


    March 31, 2019 Insurance Expense 1,000.00
    Prepaid Insurance 1,000.00

    5) X Company’s store supplies debited to prepaid supplies account during the year, P30,000.00. as of
    December 31, 2019; P17,000.00 is used. What would be the adjusting entry at the end of December 31,
    2019?

    Date Account Title/Explanation Debit Credit


    Dec.31, 2019 Supplies Expense 17,000.00
    Prepaid Supplies 17,000.00

    6) X Company’s store supplies debited to supplies expense account during the year, P30,000.00. as of
    December 31, 2019; P17,000.00 is used. What would be the adjusting entry at the end of December 31,
    2019?
    Date Account Title/Explanation Debit Credit
    Dec.31, 2019 Prepaid Supplies 13,000.00
    Supplies Expense 13,000.00
    1

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