An acountant made the following adjustments at December 31, the end of the accounting period:
a. Prepaid insurance, beginning, $300. Payments for insurance during the period, $2,900. Prepaid insurance, ending, $600.
b. Interest revenue accrued, $2,400.
c. Unearned service revenue, beginning, $1,600. Unearned service revenue, ending, $300.
d. Depreciaiton, $5,500.
e. Employees salaries owed for two days of a five-day work week; weekly payroll, $13,000.
f. Income before income tax, $20,000. Income tax rate is 35%.
1. Jounalize the adjusting entries.
2. Suppose the adjustments were not made. Compute the overall overstatement or understatement of net income as a result of the omission of these adjustments.