Exercise No. 3: Preparation of Adjusting Entries. Prepare Adjusting Entries required on December 31 for each item with your supporting computations after each entry. a. On March 1, 2013, XYZ Company paid P54,000 for 2-year insurance premium on property. The bookkeeper debited Prepaid Insurance account at the time of payment. b. On December 1, 2013, ABC Company received P120,000 as advance payment for professional services to be rendered starting 1st quarter of 2014. Unearned revenue account was credited at the time of deposit. c. Miscellaneous office supplies were purchased in the last quarter of 2014 amounting to P6,500. On December 31, inventories showed that P3,200 were on hand. The purchase was debited to Office Supplies account. d. The company's office equipment costing P100,000 is expected to have 10 years economic life with no salvage value. This was purchased by the company on Aug. 1, 2013. e. ZTE company owes a bank a 10%, 90-day note for P 150,000 dated Nov. 1, 2013.