II. Adjusting journal entries part 1.

Prepare Adjustments at the end of accounting period for each independent

Cases

1. On June 30 of the current year, the company received am 18-month promissory note amounting P51,000 with
annual interest rate of 20%. FS are prepared every year.

51,000 ×.20 = 10,200 ÷ 12 = 850 × 6 months = 5,100 Therefore,

Accrued Interest income 5,100. Interest income 5,100

2. A 6-month promissory note worth P90,000 was received on January 1 of the current year with a yearly interest
rate of 15%. FS are prepared every Semiannual.

90,000 × .15 = 13,500 ÷ 12 = 1,125 × 6 = 6,750

Accrued Interest income 6,750. Interest income 6,750

3. On February 1, Unearned service revenue before adjustments amounted P55,000. At the end of the period
P15,000 has already been rendered. FS are prepared every month.

Unearned service revenue 15,000. Service Revenue 15,000

4. The company purchased machineries on account on May 31 of the current year worth P180,000 with a recoverable
value of P30,000 after its useful life of 4 years. FS are prepared every Semiannual.

180,000-30,000= 150,000 ÷ 4 = 37,500

37,500 ÷ 12 = 3,125 × 1 =(June lang asta ) 3,125

Depreciation Expense 3,125. Accumulated Depreciation – Machinery 3,125

5. The outstanding accounts receivable as of December 31, 2020 is P60,000 and the allowance for doubtful accounts
is P2,000. The credit service revenue for the period is P250,000. A 2% of the credit service revenue is doubtful of
collection. FS are prepared every year.

Percent of Revenue Ang Gina pangita so times mo lang sa 2% ang 250,000 = 5,000

Doubtful Accounts 5,000. Allowance for Doubtful Accounts 5,000

III. Adjustments part 2

Maria Catering services, owned by Ms. Clarita Maria, has the following account balances in the General Ledger at the
end of the year, before any adjustments.
Additional information:

1. The notes receivable is dated July 31 of the current year with an interest rate of 10% collectible in 1 year.

42,000 (notes receivable) × .10 (interest) = 4,200 ÷ 12 (year) = 350 × 5(from Aug. to Dec.) = 1,750

Accrued Interest income 1,750. Interest income 1,750

2. The 5% of accounts receivable is uncollectible at the end of the period.

30,000 × .05 = 1,500 but then may na record kana na Allow. For DA na 1,000 so minus mo 1,000 so 500 nalang bilin

Doubtful Accounts 500 Allowance for Doubtful Accounts 500

3. The P25,000 in the supplies expense account is still unused supplies.

Supplies 25,000. Supplies Expense 25,000

4. Prepaid rent was recorded on March 1 of the current year. It covers 18 months of rental fees.

67,500 ÷ 18 (months) = 3,750 × 10 (months) = 37,500

Rent Expense 37,500. Prepaid Rent Expense 37,500

5. The 3-year insurance policy was purchased on January 1 of the current year.

75,000 × 12(1year) = 900,000 ÷ 36 (3 years to months= 25,000

Insurance expense 25,000. Prepaid Insurance 25,000

NOTE❗❗❗
Remember i-divide mo sya 12 months Kay sa Isa ka
year may 12 months man

Tapos multiply mo sya sa kung pila na ka months Ang

nag ligad mga the first month of transaction asta sa
time period nya
Ex. On June 30 of the current year, the company
received am 18-month promissory note amounting
P51,000 with annual interest rate of 20%. FS are
prepared every year.
Since every year sya divide mo sa 12 months tapos
multiply sa 6 months nga nag lipas from July to
December.
51,000 ×.20 = 10,200 ÷ 12 = 850 × 6 months = 5,100

Kung rent kag insurance naman i-divide mo sya sa

kung pila ka months Ang covered nya tapos multiply
sa kung pila ka months Ang nag lipas from the start of
transaction to the end of the year

Ex: 4. Prepaid rent was recorded on March 1 of the

current year. It covers 18 months of rental fees.
67,500 ÷ 18 (months) = 3,750 × 10 (months) = 37,500
Rent Expense 37,500.
Prepaid Rent Expense 37,500