Problem 3 Prepare the necessary adjusting entries on December 31, 2020 to adjust the given items below. The trial balance of Liberty Enterprises contains the following balances among others on December 31, 2020: Debit Credit Notes Receivable Prepaid Insurance Office Equipment Notes Payable Salaries Expense Rent Expense Supplies Expense Taxes and Licenses Expense Advertising Expense Interest Income Rent Income 120,000.00 48,000.00 100,000.00 150,000.00 40,000.00 36,000.00 8,000.00 6,000.00 24,000.00 9,000.00 18,000.00 Additional information as of December 31, 2020 1. Unpaid taxes, P2,400. 2. Accrued salaries, P12,800. 3. The prepaid insurance amount represents premium for one-year effective October 1, 2020. 4. Unused supplies as of December 31, P3,000. 5. Accrued interest on notes receivable, P4,000. 6. Rent collected in advance, P2,000. This is included in the P18,000 rent income account. 7. Accrued interest on notes payable, P4,000. 8. Prepaid rent, P6,000. 9. Prepaid advertising, P8,000. 10. Depreciation of office equipment, 10% per year.

Problem 3 Prepare the necessary adjusting entries on December 31, 2020 to adjust the given items below. The trial balance of Liberty Enterprises contains the following balances among others on December 31, 2020: Debit Credit Notes Receivable Prepaid Insurance Office Equipment Notes Payable Salaries Expense Rent Expense Supplies Expense Taxes and Licenses Expense Advertising Expense Interest Income Rent Income 120,000.00 48,000.00 100,000.00 150,000.00 40,000.00 36,000.00 8,000.00 6,000.00 24,000.00 9,000.00 18,000.00 Additional information as of December 31, 2020 1. Unpaid taxes, P2,400. 2. Accrued salaries, P12,800. 3. The prepaid insurance amount represents premium for one-year effective October 1, 2020. 4. Unused supplies as of December 31, P3,000. 5. Accrued interest on notes receivable, P4,000. 6. Rent collected in advance, P2,000. This is included in the P18,000 rent income account. 7. Accrued interest on notes payable, P4,000. 8. Prepaid rent, P6,000. 9. Prepaid advertising, P8,000. 10. Depreciation of office equipment, 10% per year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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