Longly Advertising Agency was founded by Jeff Longly in January 2005. Presented here are both the adjusted and unadjusted trial balances as of December 31, 2010.

Instructions
(a) Journalize the annual adjusting entries that were made.
(b) Prepare an income statement and a retained earnings statement for the year ended December 31, and a classified balance sheet at December 31.
(c) Identify which accounts should be closed on December 31.
(d) If the note has been outstanding 6 months, what is the annual interest rate on that note?
(e) If the company paid $10,500 in salaries in 2010, what was the balance in Salaries Payable on December 31,2009?

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LONGLY ADVERTISING AGENCY Trial Balance December 31, 2010 Unadjusted Adjusted $ 11,000 19,500 11,000 Cash Accounts Receivable Art Supplies Prepaid Insurance Printing Equipment Accumulated Depreciation Notes Payable Accounts Payable Interest Payable Unearned Advertising Revenue 3,350 60,000 60,000 25,000 8,000 2,000 30,000 8,000 2,000 320 3,100 1,300 20,000 5,500 4,000 Common Stock Retained Earnings Dividends Advertising Revenue Salaries Expense Insurance Expense Interest Expense Depreciation Expense Art Supplies Expense Rent Expense 20,000 10,000 10,000 57,600 62,000 9,000 10,300 1,560 320 5,000 1,900 4,350 $122,100 $122,100 132,220 $132,220