ACCOUNTING EXERCISES: JOURNALIZING AND POSTING
Problem 1
Prepare Journal Entries made on the date of the transactions and adjusting
entries for the year ending December 31, 2018 under each of the following cases:
1. Paid P48,000 for a two-year insurance policy to commence on September 1,
2018. The amount of premium was debited to Insurance Expense.
2. Borrowed P200,000 by issuing a 1-year note with 7% annual interest from
Century Bank on March 31, 2018.
3. Paid P610,000 cash to purchase a delivery van on January 1, 2018. The van was
expected to have a 6-year life and P10,000 salvage value. Depreciation is
computed on a straight-line basis.
4. Received P48,000 cash advance for a contract to provide services in the future.
The contract required a four-year commitment starting April 1, 2018. Income
method was used.
5. Purchased P64,000 of supplies C.O.D. on June 30, 2018. At year end P1,000 of
the supplies remained on hand. Expensed method was used.
6. Paid P120,000 cash in advance on September 1, 2018 for a two-year lease on
office space. Asset Method was used.
7. April 1, 2018 a total of P4,000,000 was billed to various clients for services
rendered. At year end it is estimated that four and a half percent is uncollectible
8. Paid P48,000 for a four-year insurance policy to commence on September 1,
2018. The amount of premium was debited to Prepaid insurance.
9. Received P48,000 cash advance for a contract to provide services in the future.
The contract required a four- year commitment starting April 1, 2018. Liability
method was used.
10. Purchased P64,000 of supplies C.O.D. on June 30, 2018. At year end P1,000 of
the supplies remained on hand. Asset method was used.
11. Paid P120,000 cash in advance on September 1, 2018 for a two-year lease on
office space. Expense Method was used.
Problem 1
Prepare Journal Entries made on the date of the transactions and adjusting
entries for the year ending December 31, 2018 under each of the following cases:
1. Paid P48,000 for a two-year insurance policy to commence on September 1,
2018. The amount of premium was debited to Insurance Expense.
2. Borrowed P200,000 by issuing a 1-year note with 7% annual interest from
Century Bank on March 31, 2018.
3. Paid P610,000 cash to purchase a delivery van on January 1, 2018. The van was
expected to have a 6-year life and P10,000 salvage value. Depreciation is
computed on a straight-line basis.
4. Received P48,000 cash advance for a contract to provide services in the future.
The contract required a four-year commitment starting April 1, 2018. Income
method was used.
5. Purchased P64,000 of supplies C.O.D. on June 30, 2018. At year end P1,000 of
the supplies remained on hand. Expensed method was used.
6. Paid P120,000 cash in advance on September 1, 2018 for a two-year lease on
office space. Asset Method was used.
7. April 1, 2018 a total of P4,000,000 was billed to various clients for services
rendered. At year end it is estimated that four and a half percent is uncollectible
8. Paid P48,000 for a four-year insurance policy to commence on September 1,
2018. The amount of premium was debited to Prepaid insurance.
9. Received P48,000 cash advance for a contract to provide services in the future.
The contract required a four- year commitment starting April 1, 2018. Liability
method was used.
10. Purchased P64,000 of supplies C.O.D. on June 30, 2018. At year end P1,000 of
the supplies remained on hand. Asset method was used.
11. Paid P120,000 cash in advance on September 1, 2018 for a two-year lease on
office space. Expense Method was used.
