-HOME WORK – JOURNAL ENTRIES
Required: Prepare the journal entries for the following transactions of Mae Von Thot Massage Parlor.
After each transaction, a journal entry blank format is shown. Indicate your answer on that blank Journal
Entry format.
Use the account titles as listed below:
Assets
Current Assets Current Liabilities
Cash Accounts payable
Accounts receivable Notes payable
Allowance for Bad Debts SSS payable
Notes receivable Philhealth payable
Office supplies unused Pag-ibig payable
Prepaid rent expense Withholding tax payable
Prepaid insurance Loan payable
Massage supplies unused
Non-current Assets
Massage equipment
Accumulated depreciation – Massage equipment
Furniture and fixtures
Accumulated depreciation – furniture and fixtures
Office equipment
Accumulated depreciation – office equipment
Leasehold improvements
Accumulated depreciation – leasehold improvements
Income accounts Expense accounts
Service income Advertising expense
Interest income Taxes expense
Rent income Insurance expense
Contra- income Salaries and wages
Service discount Rent expense
Office supplies expense
Owners’ Equity Massage supplies expense
Thot, Capital Interest expense
Thot, Withdrawal SSS employer’s contribution
Philhealth employer’s contribution
Pag-ibig employer’s contribution
The following are the business transactions of Mae Von Thot Massage Parlor:
Investment
1. Mae Von Thot, invested P500,000 cash in her new business.
Account titles Debit Credit
Cash P 500,000
T, Capital P 500,00
Cash is received and Capital is always credit.
2. Mae invested an old furniture, costing P5,000, but now with a fair value of P3,000
Account titles Debit Credit
Furniture and fixture P3,000
T, Capital P3,000
3. Mae, withdraw cash P2,000 for personal use.
Account titles Debit Credit
T Withdrawal P 2,000
Cash P 2,000
4. Mae bought 3 units of electric fan for P3,600, and paid cash.
Account titles Debit Credit
Office Equipment P 3,600
Cash P 3,600
5. Mae returned 1 unit of electric fan due to defect. Mae received a cash refund.
Account titles Debit Credit
Cash P 1,200
Office Equipment P 1,200
6. Mae, bought massage equipment from A Company for P40,000, on credit.
Account titles Debit Credit
Massage Equipment P 40,000
Accounts payable-A P 40,000
7. Paid the freight / transportation expenses for the delivery of massage equipment to the shop, amounting
to P2,000.
Account titles Debit Credit
Massage Equipment P2,000
Cash P2,000
8. Paid A Company in full
Account titles Debit Credit
Accounts payable-A P40,000
Cash P40,000
9. Mae bought furniture from B Company for P10,000. Terms: 50% down payment and the balance on
credit.
Account titles Debit Credit
Furniture & Fixtures P10,000
Cash (50%) P5,000
Accounts payable-B (50%) P5,000
10. Mae paid B Company in full.
Account titles Debit Credit
Accounts Payable-B P5,000
Cash P5,000
11. Mae, bought a computer for the office from Western Appliances, for P20,000. May issued a non-
interest bearing promissory note.
Account titles Debit Credit
Office Equipment P20,000
Notes payable-Western Appliances P20,000
12. Mae paid Western Appliance in full.
Account titles Debit Credit
Notes payable- Western Appliance P20,000
Cash P20,000
13. The massage parlor started operating. For the first week, there are many walk in customers who paid
cash for services rendered to them amounting to P20,000.
Account titles Debit Credit
Cash P20,000
Service Income P20,000
14. A customer who paid cash was given a service discount. He was given P200 cash.
Account titles Debit Credit
Service discount P200
Cash P200
15. A long friend of Mae, Mr. Bucol, was service by the massage parlor for 4 hours and was charged for
services rendered amounting to P4,000. Mae approved that he be given a 7 days credit.
Account titles Debit Credit
Accounts receivable-B P4,000
Service Income P4,000
16. After 7 days, Mar. Bucol, paid in full and was given a 2% service discount.
Account titles Debit Credit
Cash P3,920
Service Discount P80
Accounts Receivable-B P8,000
17. Another friend, Miss. Dinah Virgin, was given a massage service for 3 hours and was charge
for P3,000. Dinah, gave a 30 day promissory note for P3,000 with a 1% interest per month.
Account Titles Debit Credit
Notes Receivable-V P3,000
Service Income P3,000
18. After 30 days, Dinah Virgin paid the P3,000 plus interest amounting to P30.
Account titles Debit Credit
Cash P3,030
Notes Receivable-V P3,000
Interest Income P30
19. Paid advertising to C Company for P2,000.
Account titles Debit Credit
Advertising Expense P2,000
Cash P2,000
20. Paid mayor’s permit amounting to P5,000.
Account titles Debit Credit
Taxes Expense P5,000
Cash P5,000
21. Paid insurance amounting to P1,000.
Account titles Debit Credit
Insurance Expense P1,000
Cash P1,000
22. Paid the payroll of all employees:
Salaries and wages 20,000
Less: deductions:
SSS payable ( 800)
Philhealth payable ( 200)
Pag-ibig payable ( 200)
Withholding tax payable ( 300)
Net pay 18,500
Account titles Debit Credit
Salaries and Wages P20,000
SSS payable P800
Philhealth Payable P200
Pag-ibig payable P200
Withholding tax payable P300
Cash P18,500
23. All employers are mandated by law to contribute to SSS, Philihealth, Pag-ibig, as employer’s
contribution. The employer’s contributions are as follows;
SSS 1,600
Philhealth 200
Pag-ibig 200
Account titles Debit Credit
SSS employer’s contribution P1,600
Philhealth employer’s contribution P200
Pag-ibig employer’s contribution P200
SSS Payable P1,600
Philhealth Payable P200
Pag-ibig Payable P200
24. Paid SSS Payable- 2,400, Philhealth Payable – P400, Pag-big Payable – P400 and Withholding Tax
payable – P300.
Account titles Debit Credit
SSS payable P2,400
Philhealth payable P400
Pag-ibig payable P400
Withholding tax payable P300
Cash P3,500
25. Paid the rental for the month – P5,000
Account titles Debit Credit
Rent Expense P5,000
Cash P5,000
26. A portion of the massage parlor was sub-leased and received cash for the rental, P1,000.
Account titles Debit Credit
Cash P1,000
Rent Income P1,000
27. bought massage supplies from C Company for P5,000, on account, payable in 7 days.
Account titles Debit Credit
Massage Supplies Expense P5,000
Accounts Payable-C P5,000
28. On the 3rd day paid partially Company C, amounting to P3,000 only. There will a balance of P2,000.
Account titles Debit Credit
Accounts Payable-C P3,000
Cash P3,000
29. On the 7th day, paid Company C in full.
Account titles Debit Credit
Accounts payable-C P2,000
Cash P2,000
Up to this point
Borrowing from a Bank
14. Borrowed money from Cash P 20,000
PNB, P20,000 Loan payable-PNB P 20,000
15. Paid PNB, for the Loan payable-PNB P 20,000
principal and P2,000 Interest expense 2,000
interest. Cash P 22,000
