Accounts of Milo Inc. for the year ended 12/31/20 disclosed transactions shown below. Prepare the necessary journal entry and audit adjustments for each of the transactions. 1. Signed a 5-year lease for a new warehouse effective 12/1/20 at a monthly rental of P100,000. On that date, P1,000,000 was paid to cover for the following: Rent security deposit, P200,000; first month’s rent, P100,000; last month’s rent, P100,000; reimbursement to lessor for modifications to leased premises, P600,000. The entire amount was debited to Rent Expense. 2. Paid P200,000 on 12/16/20 for one-year advertising contract to take effect starting January 16, 2021. The amount was debited to Prepaid Advertising. 3. Vacation advances were made on December 17, 2020 and charged to Vacation Expense. Of this amount, P30,000 applies to vacations commencing January 1, 2021. 4. Balance of Supplies Expense Account at 12/31/20 was P33,000; physical inventory of supplies at 12/31/20 was P11,000.
Accounts of Milo Inc. for the year ended 12/31/20 disclosed transactions shown below.
Prepare the necessary
1.
Signed a 5-year lease for a new warehouse effective 12/1/20 at a monthly rental of P100,000. On that date, P1,000,000 was paid to cover for the following: Rent security deposit, P200,000; first month’s rent, P100,000; last month’s rent, P100,000; reimbursement to lessor for modifications to leased premises, P600,000. The entire amount was debited to Rent Expense.
2.
Paid P200,000 on 12/16/20 for one-year advertising contract to take effect starting January 16, 2021. The amount was debited to Prepaid Advertising.
3.
Vacation advances were made on December 17, 2020 and charged to Vacation Expense. Of this amount, P30,000 applies to vacations commencing January 1, 2021.
4. Balance of Supplies Expense Account at 12/31/20 was P33,000; physical inventory of supplies at 12/31/20 was P11,000.
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