The following information was obtained from a review of the ledger and other records of 2Moons Company at the close of the current fiscal year ending December 31, 2017. Write the adjusting entry and computation as description in your notebook.

a. The office supplies expense account has a debit balance of P38,610. The inventory of office supplies on hand as of December 31, totals P14,760.

b. The rent expense account has a debit balance of P74,400 composed of the following: (1) January 1 balance of P16,800 representing rent for January through April 2017; and (2) debit balance of P57,600 representing payment for a one-year beginning May 2017.

c. The prepaid insurance account has a debit balance of P62,640 at December 31. Details of the policies acquired during the past year are as follows:

Type of Policy Premium Paid Date Started

Fire Insurance P 12,960 January 2

Accident Insurance 24,480 March 1

Car Insurance 9,360 June 1

Life Insurance 15,840 August 1

d. The balance of the commissions income account includes a P25,500 commissions

received in advance for selling ten refrigerators. As of December 31, only four refrigerators were sold.

e. The prepaid advertising account has a debit balance of P14,040 which represent the advance payment of a yearly contract for a uniform amount of space in 52 consecutive issues of a weekly publication. As of December 31, advertisements had appeared in 18 issues of publication.

f. The unearned rent account has a credit balance of P59,040 which represent a 6-month rent received in advance from a tenant on September 1.

g. The company acquired an item of equipment for P288,000 at the beginning of the year. This equipment was estimated to have a life of 15 years with a residual value of P36,000.

h. A delivery truck was purchased on June 30 at a total cost of P936,000. This truck was estimated to have a useful life of 10 years with the scrap value of P192,000.

i. The company pays a total of P27,000 every Saturday for a six-day-work-week ending Saturday. The last payday was December 26.

j. Allowance for bad debts at the end of the year is P15,000 but the allowance at the before adjustment is P6,000 (debit).

k. Allowance for bad debts at the end of the year is P15,000 but the allowance at the before adjustment is P6,000 (credit).