PROBLEM 4-2 Preparation of adjusting entries INSTRUCTIONS:

1. Prepare adjusting entries on December 31, 2020 on the following transactions. 2. Show computation as your explanation.

The following information has been made available in connection with the closing of the books of Minda Enterprises as of December 31 are as follows: a. Salaries already due but not yet paid as of December 31, amounted to P 9,500. b. The rent income has a balance of P 6,800. Of this amount, P 1,500 has already been earned as of December 31. c. The insurance expense account amounted to P 6,000. Of this amount, P 2,000 expired as of December 31. d. The Subscription Income has a balance of P 9,800. Of this amount P 5,000 has already been earned as of December 31. e. Interest earned but not yet collected on notes receivable outstanding, p 2,400. f. Interest due on notes payable outstanding, P 4,600. g. Interest paid in advance on a bank loan was debited to interest expense account, P980. The loan will run for a period of 90-day starting from December 1. h. Interest collected and credited to interest income P 1,400. This represents interest for a 45-day period effective December 18. i. Store supplies debited to Store supplies expense, P 6,600. As of December 31, P 2,250 store supplies are still unused. j. Accounts receivable of P250,000 is only 94% is collectible. k. Building of P300,000 have an estimated useful life of 20 years with scrap value of P50,000 and was acquired on Jan 1.