Question

A review of the ledger of Oriole Company at December 31, 2020, produces the following data pertaining to the preparation of annual adjusting entries.

1.		Salaries and Wages Payable $0. There are eight employees. Salaries and wages are paid every Friday for the current week. Five employees receive $710 each per week, and three employees earn $520 each per week. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.
2.		Unearned Rent Revenue $395,280. The company began subleasing office space in its new building on November 1. Each tenant is required to make a $5,200 security deposit 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.

Date		Term (in months)		Monthly Rent		Number of Leases
Nov. 1		6		$6,160		5
Dec. 1		6		$6,820		4

3.

Prepaid Advertising $13,200. 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 shown below.

Contract		Date		Amount		Number of Magazine Issues
A650		May 1		$6,000		12
B974		Oct. 1		7,200		24

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

4.

Notes Payable $62,400. This balance consists of a note for one year at an annual interest rate of 12%, dated June 1.

Prepare the adjusting entries at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 2,520.)

Answer 1

DATE. PAGE ② No. of Employees @ $710 per week 5 - Total salary pen wecke $3550 No. of Employee @ $520 pom weenz 3 Total salary per week2 & 1560 Net Salary for whole week 2 85110 No. of Day, Salary feuding for year 20202 $5110x2 2 2014 Adjusting Entry a Salary Expense Dr.$2044 To Salary payable $2044

2 Lease Term for all senants 6 Months a) No. of Leare Start in Nov. 5 Monthly Rente & 6, 160 - Total Rent for Lease startin Nov2li84,800 b) No. of care startin Decay Monthly Reutz & 6820 Total Reut for Lease start in Del 2 $ 163,680 Security Deposit $5,200 each Tenant Total security Deposit 146800 Unearned Revenue ason 31st Dec 20202 395280 Adja Revenue earned as on 31st Dec 2020= - a Rent earned in Nov2 5x6160 230800 - b) Rent earned in Deez 5x6160 + 4x6820 = $ S 8080 Total Reveme. Carned $88880 Adjustment Eury - Unearned Reut Revenue Dr. $135680 To Revenue All $88,880 - To Security Deposit Al. & 46800

Contralt & AGID (May 1) Total Courrur Vames $6000 Total Nb of Magazine I uur 12 No. of Issues till 316 Dec 202027 No. of Issues Pending 25 Advertising expense incurred till 31st Dece - 6000x12$3500 Contract B974€ Oct) Total Contract Value & 7200 Total No. of Magazine Issue 224 No. of iemes till 316DCC23 No. of Issue, Pending 221 Advertising Expense Incurred till 31st Dec 2 7200X 3,2 floo Total Advertising Expensez $4400 Adjusting Entry Advertising Expense Dr. 44400 To Prepaid Advertising 14400 Balance Prepaid Advertising a $8800

DATE PAGE Notes payable a $640 $ 62,400 Interest 2 12.). Per annum dated Junel Total Interest Expense 2 62400x12%. 2 7488 Interest Expense accrued till 31st Dec 2020 - 788 7488x72 12 = $4368 Adjusting Entryz Interest Expense All Dr. $4368 - To Notce payable & 4368 Total Notes payable as on 31 Dec 2020 Including Interest 2 62400 +4368 2 $66,768