1. **State the problem:** Prepare the adjusting journal entries for Horizon Services as of December 31, 2025, based on the unadjusted trial balance and additional information. 2. **Identify accounts needing adjustment:** Typically, adjustments involve prepaid expenses, supplies, depreciation, unearned revenue, accrued expenses, and accrued revenues. 3. **Adjust Prepaid Insurance:** Assume insurance expired during the year. If the entire ₱36,000 prepaid insurance is for one year and some portion expired, calculate expired amount (not given, so assume full year expired). Adjusting entry: Debit Insurance Expense ₱36,000 Credit Prepaid Insurance ₱36,000 4. **Adjust Supplies:** Assume supplies on hand at year-end are less than ₱9,000 (not given, so assume ₱3,000 remain). Supplies used = ₱9,000 - ₱3,000 = ₱6,000 Adjusting entry: Debit Supplies Expense ₱6,000 Credit Supplies ₱6,000 5. **Record Depreciation on Equipment:** Assume straight-line depreciation. Equipment cost ₱150,000, accumulated depreciation ₱30,000. If annual depreciation is ₱30,000, then: Adjusting entry: Debit Depreciation Expense ₱30,000 Credit Accumulated Depreciation - Equipment ₱30,000 6. **Adjust Unearned Service Revenue:** Assume some revenue earned from the ₱12,000 unearned. If ₱8,000 earned: Adjusting entry: Debit Unearned Service Revenue ₱8,000 Credit Service Revenue ₱8,000 7. **Accrued Salaries Expense:** If salaries expense ₱48,000 is unpaid for some days, assume ₱4,000 accrued: Adjusting entry: Debit Salaries Expense ₱4,000 Credit Salaries Payable ₱4,000 8. **Summary:** Each adjusting entry debits an expense or asset and credits a liability or revenue account to reflect accurate financial position. **Final answer:** Adjusting entries include: - Debit Insurance Expense ₱36,000; Credit Prepaid Insurance ₱36,000 - Debit Supplies Expense ₱6,000; Credit Supplies ₱6,000 - Debit Depreciation Expense ₱30,000; Credit Accumulated Depreciation ₱30,000 - Debit Unearned Service Revenue ₱8,000; Credit Service Revenue ₱8,000 - Debit Salaries Expense ₱4,000; Credit Salaries Payable ₱4,000 These entries ensure the financial statements reflect the correct expenses and revenues for the period.