For the bank, the March adjusting entry is a debit to interest receivable of P1,000 and a credit to interest income for P1,000 to recognize interest earned on the loan for the first 3 months. For the insurance company, the April adjusting entry is a debit to unearned revenue of P200 and a credit to revenue of P200 to recognize revenue earned for the month. For the supplies company, the December adjusting entry is a debit to supplies expense of P800 and a credit to supplies of P800 to record the usage of supplies during the month.
For the bank, the March adjusting entry is a debit to interest receivable of P1,000 and a credit to interest income for P1,000 to recognize interest earned on the loan for the first 3 months. For the insurance company, the April adjusting entry is a debit to unearned revenue of P200 and a credit to revenue of P200 to recognize revenue earned for the month. For the supplies company, the December adjusting entry is a debit to supplies expense of P800 and a credit to supplies of P800 to record the usage of supplies during the month.
For the bank, the March adjusting entry is a debit to interest receivable of P1,000 and a credit to interest income for P1,000 to recognize interest earned on the loan for the first 3 months. For the insurance company, the April adjusting entry is a debit to unearned revenue of P200 and a credit to revenue of P200 to recognize revenue earned for the month. For the supplies company, the December adjusting entry is a debit to supplies expense of P800 and a credit to supplies of P800 to record the usage of supplies during the month.
2.1. Bdo, a bank lent P 100,000 to a customer on December 1 that
required the customer to pay an annual percentage rate (APR) of 12% on the amount of the loan. The loan is due in six months and no payment of interest or principal is to be made until the note is due on May 31. BDO prepares monthly financial statement at the end of each calendar month. Provide an answer for March only.
2.2. On December 1, AXA Insurance Co. Received P2,400 from
your company for the annual premium covering the twelve-month period beginning on December 1. AXA Insurance Co. Recorded the P2,400 receipt as of December 1 with a debit to the current asset Cash and a credit to the current liability Unearned Revenues. AXA Insurance Co. Prepares monthly financial statements at the end of each calendar month. Provide an answer for April only.
2.3. On December 1, FORTUNE comp[any began operations. On
December 4 it purchased P1,500 of supplies and recorded the transaction with a debit to the balance sheet account Supplies and a credit to the current liability accounts payable. FORTUNE company prepares monthly financial statements at the end of each calendar month. At the end of the day on December 31, FORTUNE company estimated the P700 of the supplies were still on hand in the supply room. The following questions pertain to the adjusting entry that should be entered by FORTUNE company.