QUIZ. Adjusting Journal Entries
Prepare the adjusting entry for Christine Gamba Cargo under each of the following for the year ending
December 31, 2021:
a) Paid P24,000 for 1-year fire insurance policy to commence on Sept. 1. The amount of premium
was debited to Prepaid Insurance.
b) Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Century Savings Bank on
Oct. 1, 2021.
c) Paid P160,000 cash to purchase a delivery van (surplus) on Jan. 1. The van was expected to have
a 3-year life and a P100,000 salvage value. Depreciation is computed on a straight-line basis.
(Depreciation = Cost / Useful Life)
d) Received an P18,000 cash advance for a contract to provide services in the future. The contract
required a 1-year commitment, starting April 1.
e) Purchased P6,400 of supplies on account. At year’s end, P750 of supplies remained on hand.
f) Invested P90,000 cash in a certificate of deposit that paid 4% annual interest. The certificate was
acquired on May 1 and carried a 1-year term to maturity.
g) Paid P78,000 cash in advance on Sept. 1 for a 1-year lease on office space.