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The Blue Theater is nearing the end of the year and is preparing for a meeting with its bankers to discuss the renewal of a
The Blue Theater is nearing the end of the year and is preparing for a meeting with its bankers to discuss the renewal of a loan. The accounts listed below appeared in the December 31,2025 , trial balance. Additional information is available as follows. 1. The equipment has an estimated useful life of 16 years and a salvage value of $38,400 at the end of that time. Blue uses the straight-line method for depreciation. 2. The note payable is a one-year note given to the bank January 31 and bearing interest at 10%. Interest is calculated on a monthly basis. 3. Late in December 2025, the theater sold 340 coupon ticket books at $50 each. 180 of these ticket books have been used by year-end. The cash received was recorded as Unearned Service Revenue. 4. Advertising paid in advance was $5,590 and was debited to Prepaid Advertising. The company has used $2,630 of the advertising as of December 31,2025. 5. Salaries and wages accrued but unpaid at December 31,2025 , were $3,280. Prepare any adjusting journal entries necessary for the year ended December 31,2025 . (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)
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