E$3-33$B$.($Learning Objectives $1,3$: Journalizing adjusting entries and analyzing their

effects on net income; comparing accrual and cash basis$)$ An accountant made the following

adjustments at December $31,$ the end of the accounting period:

a$.$ Prepaid insurance, beginning, $800.$ Payments for insurance during the period, $2,500.$

Prepaid insurance, ending, $1,400.$

b$.$ Interest revenue accrued, $1,200.$

c$.$ Unearned service revenue, beginning, $1,500.$ Uneamed service revenue, ending, $600.$

d$.$ Depreciation, $4,700.$

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

$24,000.$

f$.$ Income before income tax, $21,000.$ Income tax rate is $25\%.$

Requirements

Journalize the adjusting entries.

Suppose the adjustments were not made. Compute the overall overstatement or understate$-$

ment of net income as a result of the omission of these adjustments.