The following accounts appeared in the December 31 unadjusted trial balance of the Majesty Theatre:

	Debit	Credit
Equipment	$960,000
Accumulated depreciation-Equipment		120,000
Notes payable		186,000
Sales revenue		750,000
Advertising expense	62,000
Salaries and wages expense	80,000
Interest expense	9,000

Required:

1. From the account balances above and the information that follows, prepare the annual adjusting entries necessary on December 31:

1. The equipment has an estimated life of 16 years and a residual value of $40,000. (Use the straight-line method.)
2. The note payable is a 12-month note given to the bank on October 1 and bearing interest at 10%.
3. In December, 2,000 coupon admission books were sold at $25 each; they can be used for admission any time after January 1.
4. Of the Advertising Expense balance, $1,100 is paid in advance.
5. Salaries accrued but unpaid are $11,800.

2. What amounts should be shown for each of the following on the income statement for the year?

1. Interest expense
2. Sales revenue
3. Advertising expense
4. Salaries and wages expense