For each of the above transactions, prepare the journal entry to record the initial transaction. For each of the above transactions, prepare the adjusting journal entries that is required at year end. Post the journal entries in parts (a) and (b) to T-accounts and determine the final balance in each account balance. Note: posting to the Cash account is not required.
The following information were lifted from Folded & Hung Ltd.’s books for the fiscal year ended September 30, 2020:
1. Signed a 1-year contract (beginning January 1, 2020) for maintenance services from a local contractor and paid cash amounting to P72,000.
2. Purchased a 3-year car insurance policy on April 1, 2020 for P93,000.
3. On June 1, 2020, HM received an advance payment of P108,000 for computer testing services. The total contract price is for five distinct performance obligations: PO1 (P18,000), PO2 (P30,000), PO3 (P25,000), PO4 (P20,000), and PO5 (P15,000). At year-end, PO4 and PO5 were not yet performed.
4. Performed computer testing services for P45,000 and sent the bill to the customer on August 31, 2020. Amount remained uncollected at year-end.
5. On September 1, 2020, HM paid P70,000 for rent until December 31, 2020.
REQUIRED (show supporting calculations):
-
For each of the above transactions, prepare the
journal entry to record the initial transaction. -
For each of the above transactions, prepare the
adjusting journal entries that is required at year end. -
Post the journal entries in parts (a) and (b) to T-accounts and determine the final balance in each account balance. Note: posting to the Cash account is not required.
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