Prepare the ORIGINAL ENTRY and REVERSING ENTRIES at January 2, 20x3. 1. The note amounting to P500,000 was received from a customer on October 1, 20x2 with an interest of 12% per annum. Advance interest for one year was collected on the same 2. The Expense-Insurance of P24.000 shown in the unadjusted trial balance represents date and credited to Income Interest. premium for one year beginning March 1, 201x2. 3. Office supplies in the amount of P12,000 was purchased on January 2, 20x2 and debited to Expense-Office Supplies Unused office supplies at December 31, 20x2 amounted to P2,500 4. The Expense-Rent for P90,000 is advance payment for six months beginning June 16, 20x2 5. The Interest Income of P24,000 was received on August 1, 20x2 from an issuer for a one year note of P240.000 at 10% per annum 6. The Note Payable for P1,000,000 is a loan proceeds from a Bank on October 16, 20x2 with interest rate of 6% per annum. The interest for one year was deducted in advance by the bank and was debited to Expense-Interest. 7. The Rent Income of P48,000 was received from a tenant on September 30, 20x2 as advance rental for four months Please explain if possible. Thank you so much!
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Prepare the ORIGINAL ENTRY and REVERSING ENTRIES at January 2, 20x3.
1. The note amounting to P500,000 was received from a customer on October 1, 20x2 with an interest of 12% per annum. Advance interest for one year was collected on the same
2. The Expense-Insurance of P24.000 shown in the unadjusted
3. Office supplies in the amount of P12,000 was purchased on January 2, 20x2 and debited to Expense-Office Supplies Unused office supplies at December 31, 20x2 amounted to P2,500
4. The Expense-Rent for P90,000 is advance payment for six months beginning June 16, 20x2
5. The Interest Income of P24,000 was received on August 1, 20x2 from an issuer for a one year note of P240.000 at 10% per annum
6. The Note Payable for P1,000,000 is a loan proceeds from a Bank on October 16, 20x2 with interest rate of 6% per annum. The interest for one year was deducted in advance by the bank and was debited to Expense-Interest.
7. The Rent Income of P48,000 was received from a tenant on September 30, 20x2 as advance rental for four months
Please explain if possible. Thank you so much!
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