Remove index.php in Wordpress subfolders when using virtual hosts

Remove index.php in Wordpress subfolders when using virtual hosts

I have looked everywhere to find a solution to this problem, but nothing i
have tried has worked. When having the permalink settings to
/index.php/%postname%/ it works fine, but when i remove the index.php part
i only get a 404 and this in the log:
[Tue Aug 13 05:05:46 2013] [error] [client 202.58.198.84] File does not
exist: /var/www/html/domain1/postname, referer:.....
I have a Red Hat webserver running Apache with two Wordpress sites through
with virtual hosts. The virtual hosts look like this.
<VirtualHost *:80>
# General
ServerAdmin info@domain1.com
DocumentRoot /var/www/html/domain1
ServerName domain1.com
ServerAlias www.domain1.com
# Logging
ErrorLog logs/domain1-error_log
CustomLog logs/domain1-access_log common
</VirtualHost>
and
<VirtualHost *:80>
# General
ServerAdmin info@domain2.com
DocumentRoot /var/www/html/domain2
ServerName domain2.com
ServerAlias www.domain2.com
# Logging
ErrorLog logs/domain2-error_log
CustomLog logs/domain2-access_log common
</VirtualHost>
The .htaccess file in the sub folders looks like this after changing the
permalink in frontend settings.
# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>
# END WordPress
I also tried to change
RewriteBase /
to
RewriteBase /subfolder
without any luck.
This is not a huge problem but it bugs me a lot! I would appreciate if
someone had a solution to this.