A review of the ledger of Obi Company at December

A review of the ledger of Obi Company at December 31, 2010, produces the following data
pertaining to the preparation of annual adjusting entries.1. Prepaid Insurance $9,900. The
company has separate insurance policies on its buildings and its motor vehicles. Policy B4564
on the building was purchased on April 1, 2009, for $7,200.The policy has a term of 3 years.
Policy A2958 on the vehicles was purchased on January 1, 2010, for $4,500.This policy has a
term of 2 years.2. Unearned Subscriptions $45,000.The company began selling magazine
subscriptions in 2010 on an annual basis. The magazine is published monthly. The selling price
of a subscription is $45. A review of subscription contracts reveals the following.Subscription
Number of Date Subscriptions October 1........ 200 November 1....... 300 December 1.......
5001,0003. Notes Payable $100,000.This balance consists of a note for 9 months at an annual
interest rate of 9%, dated November 1.4. Salaries Payable $0.There are eight salaried
employees. Salaries are paid every Friday for the current week. Five employees receive a
salary of $700 each per week, and three employees earn $500 each per week. Assume
December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2
days of December. InstructionsPrepare the adjusting entries at December 31,2010.
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A review of the ledger of Obi Company at December
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