Question
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)
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
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