The Sheffield 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, 2020, trial balance. Debit Credit $ 5,510 187,200 $ Prepaid Advertising Equipment Accumulated Depreciation-Equipment Notes Payable Unearned Service Revenue Ticket Revenue Advertising Expense Salaries and Wages Expense Interest Expense 57,500 92,640 19,500 348,100 17,580 71,800 1,350 Additional information is available as follows. 1. 2. 3. The equipment has an estimated useful life of 16 years and a salvage value of $40,000 at the end of that time. Sheffield uses the straight-line method for depreciation. 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. Late in December 2020, the theater sold 390 coupon ticket books at $50 each. 240 of these ticket books books have been used by year-end. The cash received was recorded as Unearned Service Revenue. Advertising paid in advance was $5,510 and was debited to Prepaid Advertising. The company has used $2,500 of the advertising as of December 31, 2020. Salaries and wages accrued but unpaid at December 31, 2020, were $3,680. 4. 5. Prepare any adjusting journal entries necessary for the year ended December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. Depreciation Expense 9200 Accumulated Depreciation-Equipment 9200 2. Interest Expense 772 Interest Payable 772 3. Unearned Service Revenue 12000 Ticket Revenue 12000 4. Advertising Expense 2500 Prepaid Advertising 500 5. Salaries and Wages Expense 3680 Salaries and Wages Payable 3680 Determine Sheffield's income before and after recording the adjusting entries. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Income before Adjustments Income after Adjustments Revenue $ 389500 $ 397500 Less V: Depreciation Expense o 10100 Advertising Expense 18250 21050 Interest Expense 1450 10041 Salaries and Wages Expense 73100 76520 Net Income / (Loss) $ 296700 279789 List of Accounts