1. Gilgens Grill, an upscale restaurant on the beach, has just completed its first full year of operations on December 31, 2016. It provides meals both in its restaurant and catering. Selected balances from its general ledger before year-end adjustments follow. (All balances are normal.)

Cash	$64,000		Accounts payable	$42,400
Accounts receivable	36,000		Common stock	24,000
Prepaid advertising	4,800		Sales revenue	196,000
Supplies	3,600		Wages expense	108,000
Equipment	91,200		Rent expense	12,000
Notes payable	34,000		Utilities expense	5,500

An analysis of the firms records reveals the following:

a. The balance in Prepaid Advertising represents the amount paid for newspaper advertising for 1 year. The agreement, which calls for the same amount of space each month, covers the period from February 1, 2016, to January 31, 2017. Gilgens Grill did not advertise during its first month of operations.

b. Equipment purchased January 1, 2016, has an estimated life of eight years.

c. Utilities expense does not include the expense for December, estimated at $1,200. The bill will not arrive until January, 2017.

d. At year-end, employees have earned $12,400 in wages that will not be paid until January.

e. Supplies available at year-end amounted to $1,300.

f. At year-end, unpaid interest of $400 has accrued on the notes payable.

g. The firms lease calls for rent of $1,000 per month payable on the first of each month, plus an amount equal to 1% of annual sales. The rental percentage is payable within 15 days after the end of the year.

Prepare adjusting entries in journal entry form.