A review of the ledger of Ordman Company at December 31, 2007, produces the Prepare adjusting entries.

following data pertaining to the preparation of annual adjusting entries. (SO 4, 5) 1. Salaries Payable $0: There are eight salaried employees. Salaries are paid every Friday for the current week. Six employees receive a salary of $800 each per week, and two employees earn $600 each per week. December 31 is a Wednesday.

Employees do not work weekends. All employees worked the last 3 days of December. 2. Unearned Rent Revenue $369,000: The company began subleasing office space in its new building on November 1. Each tenant is required to make a $5,000 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.

Term Monthly Number Date (in months) Rent of Leases Nov. 1 6 $4,000 5 Dec. 1 6 8,500 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 follows.

Number of Magazine Contract Date Amount Issues A650 May 1 $6,000 12 B974 Sept. 1 7,200 18 The first advertisement runs in the month in which the contract is signed. 4. Notes Payable $80,000: This balance consists of a note for 1 year at an annual interest rate of 7%, dated October 1, 2007.

Instructions Prepare the adjusting entries at December 31, 2007. Show all computations.