A review of the ledger of Sandhill Company at December $31,2025,$ produces these data pertaining to the preparation

of annual adjusting entries.

Prepaid Insurance $$20,325.$ The company has separate insurance policies on its buildings and its motor

vehicles. Policy B$4564$ on the building was purchased on July $1,2024,$ for $$13,050.$ The policy has a term of $3$

years. Policy A$2958$ on the vehicles was purchased on January $1,2025,$ for $$9,450.$ This policy has a term of

$18$ months.

Unearned Rent Revenue $$538,500.$ The company began subleasing office space in its new building on

November $1.$ At December $31,$ the company had the following rental contracts that are paid in full for the

entire term of the lease.

Notes Payable $$44,800.$ This balance consists of a note for $6$ months at an annual interest rate of $7\%,$ dated

October $1.$

Salaries and Wages Payable $$0.$ There are eight salaried employees. Salaries are paid every Friday for the

current week. Six employees receive a salary of $$625$ each per week, and two employees earn $$745$ each per

week. Assume December $31$ is a Wednesday. Employees do not work weekends. All employees worked the

last $3$ days of December.