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A review of the ledger of Carmel Company at December 31, 2014, produces the following data pertaining to the preparation of annual adjusting entries.
1.
Prepaid Insurance $10,306. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on April 1, 2013, for $7,848. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2014, for $4,420. This policy has a term of 2 years.
2.
Unearned Rent Revenue $319,140. 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.
Date
Term (in months)
Monthly Rent
Number of Leases
Nov. 1
9
$4,640
4
Dec. 1
6
$8,450
3
3.
Notes Payable $122,400. This balance consists of a note for 9 months at an annual interest rate of 10%, dated November 1.
4.
Salaries and Wages Payable $0. There are 8 salaried employees. Salaries are paid every Friday for the current week. 5 employees receive a salary of $710 each per week, and 3 employees earn $590 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.
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