MODULE 2

ADJUSTING ENTRY
PREPAYMENTS
ASSET
METHOD
EXPENSE
METHOD
ASSET
METHOD
INITIAL
PREPAID EXPENSE PXXX
CASH PXXX
ADJUSTMENT
EXPENSE PXXX
PREPAID EXPENSE PXXX
EXPIRED
PORTION
EXPENSE
METHOD
INITIAL
EXPENSE PXXX
CASH PXXX
ADJUSTMENT
PREPAID EXPENSE PXXX
EXPENSE PXXX
UNEXPIRED
PORTION
UNEARNED INCOME
LIABILITY
METHOD
INCOME
METHOD
LIABILITY
METHOD
INITIAL
CASH PXXX
UNEARNED INCOME PXXX
ADJUSTMENT
UNEARNED INCOME PXXX
INCOME PXXX
EXPIRED
PORTION
INCOME
METHOD
INITIAL
CASH PXXX
INCOME PXXX
ADJUSTMENT
INCOME PXXX
UNEARNED INCOME PXXX
UNEXPIRED
PORTION
ACCRUALS
ACCRUED
INCOME
ACRUED
EXPENSE
ACCRUALS
ACCRUED
INCOME
RECEIVABLE PXXX
INCOME PXXX
ACCRUED
EXPENSE
EXPENSE PXXX
ACCRUED EXPENSE PXXX
UNEXPIRED
PORTION
ASSET
METHOD
INITIAL
PREPAID RENT. P14,000
CASH P14,000
ADJUSTMENT
RENT EXPENSE P3,500
PREPAID RENT P3,500
EXPIRED
PORTION
Rent of $14,000 was paid
for four months in
advance on December
1.
EXPENSE
METHOD
INITIAL
RENT EXPENSE P14,000
CASH P14,000
ADJUSTMENT
PREPAID RENT P10,500
RENT EXPENSE P10,500
UNEXPIRED
PORTION
Rent of $14,000 was paid
for four months in
advance on December
1.
LIABILITY
METHOD
INITIAL
CASH P14,000
UNEARNED RENT P14,000

ADJUSTMENT
UNEARNED RENT P3,500
RENT INCOME P3,500
EXPIRED
PORTION
Rent of $14,000 was
received for four months
in advance on December
1.
INCOME
METHOD
INITIAL
CASH P14,000
RENT INCOME P14,000

ADJUSTMENT
RENT INCOME P10,500
UNEARNED RENT P10,500
EXPIRED
PORTION
Rent of $14,000 was
received for four months
in advance on December
1.
ACCRUALS
ACCRUED
EXPENSE
WAGES EXPENSE $8,000
WAGES PAYABLE $8000
Wages amounting to $8,000 for
the last two days in December
were not paid and not recorded.
The next payroll will be in
January.
ACCRUALS
ACCRUED INCOME
INTEREST REC. $6,000
INTEREST INCOME $6,000
Interest earned amounting to
$6,000 on December 31 2014 to
be collected on January 1, 2015.