Chapter 4 The Amato Theater is nearing the end of the year. The accounts listed below appeared in the December 31, 2014, trial balance. NOTE: This is NOT a complete trial balance Prepaid Advertising Equipment Debit Credit s 6,000 192,000 $ 60,000 90,000 17,500 360,000 Notes Payable Unearned Ticket Revenue Ticket Revenue Advertising Expense Salaries Expense Interest Expense 18,680 67,600 1,400 dditional information is available as follows: 1. The equipment, purchased in an earlicr year for $192,000, has an estimated useful life of 6 years and a salvage value of $40,000 at the end of that time. Amato uses the straight- line method for depreciation. No depreciation has been recorded for the year 2. The note payable is a one-year note given to the bank January 31 and bearing interest at 10% over 12 months. Principal and interest are due to the bank on January 31, 2015, No interest expense has been recorded on this note in 2014; the current amount of interest expense stems from other interest-bearing liabilities 3. Late in November 2014, the theater sold 350 coupon ticket books at $50 cach. By December 31, 2014, 290 of the books are still outstanding and can be used for admission any time in 2015. The cash received initially was recorded as Unearned Ticket Revenue This account has not been adjusted for coupon books already used in 2014 4. Advertising paid in advance was $6,000 and was debited to Prepaid Advertising. The Company has used $2,500 of the advertising as of December 31, 2014 5. Salaries accrued but unpaid at December 31, 2014, totaled $3,500. INSTRUCTIONS: I. Prepare any adjusting journal entries necessary for the year ended December 31, 2014. 2. Using the trial balance portion above and any additional accounts and account balances created from the adjusting journal entries, determine Amato's income before and after recording the adjusting entries. Please show your calculations and label your results. Create the first payroll entry in which a total payroll of s12,300 (including the $3,500 in salaries accrued by 12/31/14) was paid on January 10, 2015