December $31,2024,$ year$-$end adjusting entries for Vitos Pizza Parlor appears below. 

 

On July $1,2024,$ purchased $$10,500$ of IBM Corporation bonds at face value. The bonds pay interest twice a year on January $1$ and July $1.$ The annual interest rate is $12\%.$

Vitos depreciable equipment has a cost of $$36,600,$ a six$-$year life, and no salvage value. The equipment was purchased in $2022.$ The straight$-$line depreciation method is used.

On November $1,2024,$ the bar area was leased to Jack Donaldson for one year. Vitos received $$6,300$ representing the first six months rent and credited deferred rent revenue at the time cash was received.

On April $1,2024,$ the company paid $$2,520$ for a two$-$year fire insurance policy and debited prepaid insurance at the time of the payment.

On October $1,2024,$ the company borrowed $$21,000$ from a local bank and signed a note. Principal and interest at $12\%$ will be paid on September $30,2025.$

At year$-$end, there is a $$1,850$ debit balance in the supplies $($asset$)$ account. Only $$710$ of supplies remain on hand.

Required:

Prepare the necessary adjusting journal entries on December $31,2024.$

Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. $($Ignore income tax expense.$)$