Atty. Namjoonie began business on January 1, 2020. The unadjusted trial balance for the first year of operation is found below. The following data were collected for adjustments: 1. The balance in the Notes Receivable is for a single P60,000 note from a customer dated December 16, 2020. The note, due February 14, 2021, carries an interest rate of 20%. 2. A count of office supplies showed P12,000 still on hand as at December 31. 3. Bad accounts should be established amounting to P7,000 which seems to be uncollectible. 4. Atty. Namjoonie invested P35,000 of the furniture and fixtures when the clinic was opened on January 1. It is estimated to have a useful life of five years, no scrap value. 5. The office equipment was purchased on February 28 for P280,000. It has as estimated useful life of five years and a residual value of P40,000. 6. The salary of a newly hired secretary, Miss Queenie, amounting to P9,000 for the month of December, has not been paid and recorded. 7. Only P7,000 shown in the Unearned Legal Fees Revenue have not been earned. 8. The P30,000 worth of Furniture and Fixtures was bought last July 1, 2020. It has a useful life of 5 years with P5,000 salvage value. 9. On December 31, 2021, Miss Queenie found out that Mr. Namjoonie's legal services rendered to Mr. Sugashi has not been recorded. The service was rendered last November 12, 2020 amounting to P5,000. 10. The owner of the space Mr. Namjoonie is renting asked for an advance payment for the month of January 2021. The business paid P3,000 to the owner of the space for this advance payment. Namjoonie Law Office Unadjusted Trial Balance 31-Dec-20 Debit Credit Cash 191,000.00 Accounts Receivable 27,000.00 Notes Receivable 60,000.00 Office Supplies Furniture and Fixtures 39,000.00 65,000.00 280,000.00 Office Equipment Accounts Payable Unearned Legal Fees Revenue Atty. Namjoonie, Capital Atty. Namjoonie, Drawings Legal Fees Revenue Rent Expense 5,000.00 17,000.00 175,000.00 16,000.00 658,000.00 93,000.00 Taxes and Licenses 15,000.00 Utilities Expense 69,000.00 TOTAL 855,000.00 855,000.00 Requirements: Prepare adjusting journal entries (with computation as explanation) for the above adjustment transactions.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.