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The Swifty Theater is nearing the end of the year and is preparing for a meeting with its bankers to discuss the renewal of a
The Swifty 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 | ||||||
Prepaid Advertising | $ | 5,960 | |||||
Equipment | 163,200 | ||||||
Accumulated Depreciation-Equipment | $ | 58,200 | |||||
Notes Payable | 84,480 | ||||||
Unearned Service Revenue | 16,500 | ||||||
Ticket Revenue | 370,300 | ||||||
Advertising Expense | 16,930 | ||||||
Salaries and Wages Expense | 73,300 | ||||||
Interest Expense | 1,340 |
Additional information is available as follows.
1. | The equipment has an estimated useful life of 16 years and a salvage value of $33,600 at the end of that time. Swifty 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 2020, the theater sold 330 coupon ticket books at $50 each. 170 of these ticket books books have been used by year-end. The cash received was recorded as Unearned Service Revenue. | ||
4. | Advertising paid in advance was $5,960 and was debited to Prepaid Advertising. The company has used $2,630 of the advertising as of December 31, 2020. | ||
5. | Salaries and wages accrued but unpaid at December 31, 2020, were $3,590.
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.) |
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