A reviev of the ledger of Baylor Company at December 31, 2014, produces the following data pertaining to yhe preparation of annual adjusting entries.

1) Prepaid Advertising $13,200. This balance consist 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	nr of magazine issues
A650	May1	$6000	12
B974	Oct.1	$7200	24

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

2) Notes Payable $60,000. This balance consists of a note of one year at annual interest rate of 12%, dated June1.

Prepare the adjusting entries at December 31, 2014. Show all your computations please