An accountant made the following adjustments at December 31, the end of the accounting period:

a. Prepaid insurance, beginning, $600. Payments for insurance during the period, $2,000. Prepaid insurance, ending, $1,200.

b. Interest revenue accrued, $2,100.

c. Unearned service revenue, beginning, $1,800. Unearned service revenue, ending, $400.

d. Depreciation, $5,200.

e. Employees' salaries owed for two days of a five-day work week; weekly payroll, $18,000.

f. Income before income tax, $25,000. Income tax rate is 35%.

Requirements

1. Journalize 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.