Question

The Swifty Theater is nearing the end of the year and is preparing for a meeting...

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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