Consider the following transactions for Liner Company:

a. Received a $ 220 utility bill for electricity usage in December to be paid in January 2015.

b. Owed wages to 10 employees who worked three days at $ 150 each per day at the end of December 2014. The company will pay employees at the end of the first week of January 2015.

c. On September 1, 2014, lent $ 3,000 to an officer who will repay the loan in one year at an annual interest rate of 6 percent.

Required:

1. Prepare the adjusting entries required for the year ended December 31, 2014, using the process illustrated in the chapter.

2. For each of the transactions above, indicate the amount and direction of the effects of the adjusting entry on the elements of the statement of financial position and statement of earnings. Use the following format: + for increase, €“ for decrease, and €œ N€ for no effect.

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Statement of Financial Position Statement of Earnings Shareholders EquityRevenues Expenses Earnings Net TransactionAssets Liabilities