Adjustments are done in the financial statements at the end of the financial period. Prepaid items are one of the adjusting items. Prepaid items are recorded at the time of payment and adjustment for expense is made at the ending date of the financial year. To identify: the transaction on September 1 for payment of rent.

Question

Entity A received a 12%, ₱200,000, one-year, note receivable on October 1, 20x1. Entity A uses a calendar year period. The principal and interest on the note are due on October 1, 20x2. What is the adjusting entry to take up accrued interest income on December 31, 20x1? Entity A is renting out its building to a tenant for a monthly rent of ₱30,000. As of December 31, 20x1, the tenant has not yet paid the rent for the months of November and December. What is the adjusting entry to take up accrued rent income on December 31, 20x1? Entity A issued a 12%, ₱500,000, one-year, note payable on July 1, 20x1. The principal and interest are due on July 1, 20x2. What is the adjusting entry to take up accrued interest expense on December 31, 20x1? Entity A has equipment with a historical cost of ₱1,000,000. The equipment was estimated to have a 10-year useful life when it was acquired four years ago. What is the adjusting entry to take up the annual depreciation…

Answer 1

Question

Chapter 4, Problem 4.6.2E

To determine

Concept Introduction:

Adjustments are done in the financial statements at the end of the financial period. Prepaid items are one of the adjusting items. Prepaid items are recorded at the time of payment and adjustment for expense is made at the ending date of the financial year.

To identify: the transaction on September 1 for payment of rent.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

Entity A received a 12%, ₱200,000, one-year, note receivable on October 1, 20x1. Entity A uses a calendar year period. The principal and interest on the note are due on October 1, 20x2. What is the adjusting entry to take up accrued interest income on December 31, 20x1? Entity A is renting out its building to a tenant for a monthly rent of ₱30,000. As of December 31, 20x1, the tenant has not yet paid the rent for the months of November and December. What is the adjusting entry to take up accrued rent income on December 31, 20x1? Entity A issued a 12%, ₱500,000, one-year, note payable on July 1, 20x1. The principal and interest are due on July 1, 20x2. What is the adjusting entry to take up accrued interest expense on December 31, 20x1? Entity A has equipment with a historical cost of ₱1,000,000. The equipment was estimated to have a 10-year useful life when it was acquired four years ago. What is the adjusting entry to take up the annual depreciation…

A company receives rent for subletting part of its office block. Rent, receivable quarterly in advance, is received as follows: Date of receipt Period covered $ 1 October 20X1 3 months to 31 December 20X1 7,500 30 December 20X1 3 months to 31 March 20X2 7,500 4 April 20X2 3 months to 30 June 20X2 9,000 1 July 20X2 3 months to 30 September 20X2 9,000 1 October 20X2 3 months to 31 December 20X2 9,000 What figures, based on these receipts, should appear in the company's financial statements for the year ended 30 November 20X2?

Corrections: - reads "5000 was collected for July's sales." should read "$5000 in services (and cash collection) were complete each month at the end of may, june, july, and august." - the scaffolding lease is for a year rental term.Prepare the journal entries to record the transactions.