P3‑5 (Adjusting Entries) The accounts listed below appeared in the December 31 trial balance of the Savard Theater.
Debit Credit
Equipment $192,000
Accumulated Depreciation—Equipment $ 60,000
Notes Payable 90,000
Admissions Revenue 380,000
Advertising Expense 13,680
Salaries Expense 57,600
Interest Expense 1,400
(a) From the account balances listed above and the information given below, prepare the annual adjusting entries necessary on December 31. (Omit explanations.)
1. The equipment has an estimated life of 16 years and a salvage value of $24,000 at the end of that time. (Use straight-line method.)
2. The note payable is a 90-day note given to the bank October 20 and bearing interest at 8%. (Use 360 days for denominator.)
3. In December 2,000 coupon admission books were sold at $30 each. They could be used for admission any time after January 1.
4. Advertising expense paid in advance and included in Advertising Expense $1,100.
5. Salaries accrued but unpaid $4,700.
(b) What amounts should be shown for each of the following on the income statement for the year?
Interest expense
Admissions revenue
Advertising expense
Salaries expense
Click here for the solution: The accounts listed below appeared in the December 31 trial balance of the Savard Theater
