Exercise 4 prepares year-end adjusting entries. Make the appropriate adjusting entry for Joey Advertising closes its books every December 31 and correspondingly each of the following items. 1. Last October 15, Joey Advertising decided to sign the company for a nine-month advertising contract for a full blast advertising of all of its products. The company received P810,000 for the contract and the accountant credited the amount to Unearned Advertising 2. Last August 1, the company subscribed to a business magazine paying P12,960 for a two-year subscription to start that same month. This was recorded to Prepaid Subscription 3. Supplies account at the beginning of the year showed a balance of P10,800, No purchases were made during the year. Supplies used during the year amounted to P6,800. 4. A machine costing P750,000, with a salvage value of P50,000 and an estimated useful life of 14 years, is depreciated on a straight line basis. 5. Utilities bill was received last December 27 amounting to P3,123. The company intends to pay it on January 3 the following year. 6. Last May 31, the company decided to rent a garage as parking space of its company vehicles. Six-month rent was paid in advance in the amount of P30,000. The Asset Method was used to record this transaction. 7. Last June 30, the company lent Bugnot Co. P120,000 at 12% per annum. 8. Last Sept. 1, the fifth floor of the company building was leased to El Tuttie Enterprises at P 396,000 per annum. 9. Joey Advertising received P 640,000 representing an 8-month lease contract. The Liability Method was used to record the receipt of payment. 10. Doubtful accounts at the end of the year are estimated to be 3% of Accounts Receivable which has a balance of P355,000. 11. The company constructed its own building with total cost amounting to P 27.000.000 The building has an estimated useful life of 25 years and a P2,000,000. The building was completed last May 31. Depreciation will start after the building's completion