Preparation of Adjusting Journal Entries

1.) Metro Manila Hotel borrowed money from Development bank of the Phils. with 2,000 interest per month payable every 5th of the following month . The interest for the month of December 20A will be paid on January 05, 20B.

A. Metro Manila Hotel

B. DBP

2.) E. Omamalin Realty Co. who owns a builing in the downtown area in Ozamis City was partly rented by Venus Drug Company sometime last year. Based on their lease contract agreement the rental will be paid every second day after the end of every month in the amount of P50,000 and it was being done on a consistent basis. The Fiscal Year will end on June 30 and payment of the rental will be made beyond this. How will both accountants of E. Omamalin Realty Co. and Venue Drug Company take up in the record as an adjustment in their respective books of accounts?

A. E. Omamalin Realty Co.

B. Venus Drug Company

3.) On May 30, 2016, ONB collected the amount of P20,000 representing advanced interest from a loan . The advanced interest will cover the period from May 30, 2016 to May 30, 2017. The accounting period end on December 31, 2016.

A. Liability Method

B. Income Method

4.) On August 01, 2016 , Junicel Aguilar Co. insured its property with Abo insurance company and pays premium of P24,000 for one year policy contract covering the period from Aug, 01, 2016 to Aug. 01, 2017. The accounting period ends on December 31, 2016.

A. Asset Method

B. Expense Method