Polonius Theatre Co. (PTC) has reported pre-tax income of $280,000 for 2020 before the December 31 year-end adjusting entries have been made. The controller has given you five items to review. 1) On September 1, 2020, PTC borrowed $42,000 in the form of a note payable from the bank. The note carries 7% interest, and is due to be repaid on March 1, 2021. 2) On May 31, 2020, PTC entered into a contract to provide services to a customer for 15 months. The services are to be provided evenly over the term of the contract. The customer paid the $18,000 fee in full on June 1, and PTC credited the amount to Service Revenue. 3) On August 1, 2020, PTC paid for one year of rent on a warehouse to store its theatre equipment. The $48,000 amount was debited to Prepaid Rent when it was paid. 4) Depreciation on office equipment has not been recorded; for 2020, depreciation on the office equipment is $17,000. 5) The December utilities bill has not been received as of December 31. PTC has equalized billing for its utilities, and each month's bill is $950. Required: a) Prepare any adjusting entries needed at December 31, 2020 for the items identified. b) Assuming PTC has a 30% tax rate, calculate net income for PTC for 2020. Use the following format (no formal statement is required): 2020 pre-tax income before adjustments: $250,000 Add (deduct) Item 1) ? 2) ? 3) ? 4) ? 5) Total pre-tax income: ? Income tax expense: Net income for 2020 Web