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 9 $5,000 5 Dec. 1 6 $8,500 4 3 Notes Payable $40,000. This balance consists of a note for 6 months at an annual interest rate of 7%, dated October 1.

4 Salaries and Wages 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. Assume December 31 is a Wednesday.

Employees do not work weekends. All employees worked the last 3 days of December.

Instructions Prepare the adjusting entries at December 31, 2014.

AppendixLO1