confused10191
Nov 28, 2011, 01:15 AM
I am having a hard time solving #3 but if you see any mistakes please point them out.
AP3-4A
A review of the ledger of Remington Company at December 31, 2010, produces the following data pertaining to the preparation of annual adjusting entries.
Salaries Payable $0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $990 each per week, and three employees earn $540 each per week. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.
Unearned Rent $315,546. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Term Number of
Date
(in months)
Monthly Rent
Leases
Nov. 1 6 $4,111 5
Dec. 1 6 8,009 4
Prepaid Advertising $17,088. 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
Issue
A650 May 1 $7,228 13
B974 Oct. 1 9,860 29
The first advertisement runs in the month in which the contract is signed.
Notes Payable $149,388. This balance consists of a note for one year at an annual interest rate of 7%, dated June 1.
Instructions
Prepare the adjusting entries at December 31, 2010. (Round answers to 0 decimal places, e.g. 125.)
Date Account/Description Debit Credit
1. Dec. 31 Salaries expense 2628
Accounts Payable 2628
2. 31 Rent Expense 73,146
Rent Revenue 73,146
3. 31 ?Advertising Expense ?
?Prepaid advertising ?
4. 31 Interest expense 6,100
Interest payable 6,100
AP3-4A
A review of the ledger of Remington Company at December 31, 2010, produces the following data pertaining to the preparation of annual adjusting entries.
Salaries Payable $0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $990 each per week, and three employees earn $540 each per week. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.
Unearned Rent $315,546. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Term Number of
Date
(in months)
Monthly Rent
Leases
Nov. 1 6 $4,111 5
Dec. 1 6 8,009 4
Prepaid Advertising $17,088. 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
Issue
A650 May 1 $7,228 13
B974 Oct. 1 9,860 29
The first advertisement runs in the month in which the contract is signed.
Notes Payable $149,388. This balance consists of a note for one year at an annual interest rate of 7%, dated June 1.
Instructions
Prepare the adjusting entries at December 31, 2010. (Round answers to 0 decimal places, e.g. 125.)
Date Account/Description Debit Credit
1. Dec. 31 Salaries expense 2628
Accounts Payable 2628
2. 31 Rent Expense 73,146
Rent Revenue 73,146
3. 31 ?Advertising Expense ?
?Prepaid advertising ?
4. 31 Interest expense 6,100
Interest payable 6,100