Answer:
1) The equipment has an estimated life of 16 years and a salvage value of $24,000 at the end of that time.
depreciation expense per year = ($192,000 - $24,000) / 16 = $10,500
Dr Depreciation expense 10,500
Cr Accumulated depreciation 10,500
2) The note payable is a 90-day note given to the bank on October 20 and bearing interest at 8%.
using a 360 day year, accrued interest = $90,000 x 8% x 72/360 days = $1,440
Dr Interest expense 1,440
Cr Interest payable 1,440
3) In December, 2,000 coupon admission books were sold at $30 each and recorded as Admissions Revenue. They could be used for admission any time after January 1.
Dr Admissions revenue 60,000
Cr Deferred revenue 60,000
4) Advertising expense paid in advance and included in Advertising Expense $1,100.
Dr Advertising expense 1,100
Cr Prepaid advertising expense 1,100
5) Salaries and wages accrued but unpaid $4,700.
Dr Wages expense 4,700
Cr Wages payable 4,700
