On February 1, 2020, Manny Morris decided to open Trendy Movie Theater, a movie theater near a college campus. The movie theater operates as a corporation. The incorporated business uses accrual accounting and issues financial statements on a monthly basis.

Part I: Analyze the February events that are presented below and prepare Trendy Movie Theaters journal entries (if required) for the following events. Make sure to include a date for each required journal entry.

The companys chart of accounts shows that the theater uses the following accounts: Cash, Accounts Receivable, Supplies, Equipment, Accumulated Depreciation, Notes Payable, Accounts Payable, Unearned Revenue, Common Stock, Dividends, Admissions Revenue, Advertising Expense, Utilities Expense, Depreciation Expense, Interest Expense, Interest Payable, Supplies Expense

Here is an example of the correct format for journal entries.

Example:

Feb. 1

Borrowed $1,000 by signing a 3%, 18-month note.

Feb. 1 Cash 1,000

Notes Payable 1,000

February 2020 Activities:

Feb. 1

Manny Morris invests $25,000 cash in the corporation in exchange for common stock to start a movie theater business.

Feb. 1

Paid $25,000 for a new movie projector for the theater, paying $4,000 in cash and signing a 2%, five-year note for the balance.

Feb. 8

Received $1,000 cash from the sale of movie tickets.

Feb. 10

Billed the college football team $1,500 for a private movie night held at the theater.

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Feb. 15

Collected $1,800 cash from the womens soccer team for advance tickets to a new film that will be shown at the theater on February 29.

Feb. 17

Purchased $1,200 of cleaning supplies on account to clean the theater due to the spread of the coronavirus.

Feb. 19

Paid cash dividends of $1,200.

Feb. 25

Paid for the supplies that were purchased on February 17.

Feb. 28

Received a $100 bill from the Leader Telegram, the local newspaper, for a February advertisement.

Part II: Prepare Trendy Movie Theatersjournal entriesto record all required adjustments at February 29, 2020, based on the adjustment information provided below. Make sure to date each adjustment.

1. The theater depreciates the projector at a rate of $1,000 per month.
2. Record accrued interest on the February 1 note.
3. On February 29, the theater showed a new film to the womens soccer team after receiving an advance payment from the soccer team on February 15 (See Feb. 15 event).
4. The companys records showed that $100 of cleaning supplies remained on hand at February 29, 2020 (Refer to February 17)
5. On March 4, 2020, the movie theater received a $500 bill from the utilities company for February utilities.