1. A review of the ledger of Splish Brothers Inc. on December 31 produces the following data for the preparation of annual adjusting entries: 
2. 1. Salaries and Wages Payable, $0. There are 7 salaried employees. 5 employees receive a salary of $1,270 each per week, and 2 employees earn $650 each per week. Employees do not work weekends. All employees worked two days after the last pay period and before December 31. 
3. 2. Unearned Rent Revenue, $409,290. The company began subleasing condos in its new building on November 1. Each tenant has to make a $5,370 security deposit that is not refundable until occupancy is ended. 
4. On December 31, the company had the following rental contracts that were paid in full for the entire term of the lease: Date Term (in months) Monthly Rent Number of Leases Nov. 1 6 $4,000 5 Dec. 1 6 $10,040 4 3. Prepaid Advertising, $15,300. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. 
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6. The terms of the contracts are as follows: Contract Date Amount Number of magazines Issues A650 May 1 $7,260 12 B974 Oct. 1 8,040 24 The first advertisement runs in the month in which the contract is signed. 4. Notes Payable, $79,800. This balance consists of a one-year, 7%, note that is dated June 1. Collapse question part (a) Prepare the adjusting entries on December 31.