OCEAN PARK HOTEL in Problem 2-6 reported the following accounts receivable as of Dec. 31, 2020:

Trisha Hotel	P800,000
Daika Hotel	2,000,000
Shalani Hotel	1,500,000
Rosanna Hotel	1,000,000
Other accounts receivable	5,000,000

During the year the Chicken House declared bankruptcy, so, the receivable balance of P1,800,000 was written off.

Ocean Park determined that the Trisha's account is impaired by P500,000 and the Rosanna account is totally impaired. The other accounts receivable from Daika and Shalani are not considered impaired.

Ocean Park also determined that a composite rate of 6% again is still appropriate to measure impairment on all other accounts receivable.

REQUIRED: 1. Prepare the adjusting entry to record the impairment loss of accounts receivable as of Dec. 31, 2020.

Answer rating: 100% (QA)

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