Question
A review of the ledger of Terrell Company at December 31, 2012, produces these data pertaining to the preparation of annual adjusting entries. 1. Prepaid
A review of the ledger of Terrell Company at December 31, 2012, produces these data pertaining to the preparation of annual adjusting entries.
1. Prepaid Insurance $20,461. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2011, for $13,710. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2012, for $9,036. This policy has a term of 18 months.
2.Unearned Sales Revenue $27,072: The company began selling magazine subscriptions on October 1, 2012, on an annual basis. The selling price of a subscription is $24. A review of subscription contracts reveals the following.
3. Notes Payable, $47,200: This balance consists of a note for 6 months at an annual interest rate of 7%, dated October 1. 4.Salaries Payable $0: There are 10 salaried employees. Salaries are paid every Friday for the current week. 6 employees receive a salary of $650 each per week, and 4 employees earn $770 each per week. Assume December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December. |
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