Problem 3-4A

 A review of the ledger of Remington Company at December 31, 2010, produces the

following data pertaining to the preparation of annual adjusting entries.

1. Salaries Payable $0.There are eight salaried employees. Salaries are paid every Friday for the

current week. Five employees receive a salary of $800 each per week, and three 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 $324,000. 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 $4,000 5

Dec. 1 6 $8,500 4

3. Prepaid Advertising $15,000.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 $5,400 12

B974 Oct. 1 9,600 24

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

4. Notes Payable $120,000.This balance consists of a note for one year at an annual interest rate

of 9%, dated June 1.

Instructions

Prepare the adjusting entries at December 31, 2010. (Show all computations.)

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