A review of the ledger of Felipe Company at December 31 2012 produces the foll

A review of the ledger of Felipe Company at December 31 2012 produces the following data pertaining to the preparation of annual adjusting entries.

1. Salaries and Wages Payable $0: There are eight salaried employees. Salaries are paid every Friday for the current week. Six employees receive a salary
of $800 each per week and two employees earn $600 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the
last 2 days of December.

2. Unearned Rent Revenue $300000: The company began subleasing office space in its new building on November 1. Each tenant is required to make a $5000
security dep osit that is not refundable until occupancy is terminated. At December 31 the company had the following rental contracts that are paid in full
for the entire term of the lease.

Term

Monthly

Number

Date

(in months)

Rent

of Leases

Nov. 1

6

$4000

5

Dec. 1

6

7500

4

3. Prepaid Advertising $13200: This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade
magazines. The terms of the contracts are as follows.

Number of

Magazine

Contract

Date

Amount

Issues

A650

May 1

$6000

12

B974

Sept. 1

7200

18

The first advertisement runs in the month in which the contract is signed.

4. Notes Payable $80000: This balance consists of a note for 1 year at an annual interest rate of 8% dated April 1 2012.

Instructions

Prepare the adjusting entries at December 31 2012. Show all computations.