A review of the ledger of Montana Company at December 31, 1998, produces these data pertaining to the preparation of annual adjusting entries:

1. Prepaid Insurance \(\$ 12,800\) : The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1,

1997, for \(\$ 9,600\). The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 1998, for \(\$ 4,800\). This policy has a term of 2 years.
2. Unearned Subscription Revenue \(\$ 49,000\) : The company began selling magazine subscriptions in 1998 on an annual basis. The selling price of a subscription is \(\$ 50\). A review of subscription contracts reveals the following:

3. Notes Payable, \(\$ 50,000\) : This balance consists of a note for 6 months at an annual interest rate of \(9 \%\), dated September 1 .
4. Salaries Payable \(\$ 0\) : There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of \(\$ 600\) each per week, and three employees earn \(\$ 700\) each per week. December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December.
\section*{Instructions}
Prepare the adjusting entries at December 31, 1998.

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Subscription Date Number of October 1 November 1. December 1 Subscriptions 200 300 480 980