The unadjusted and adjusted trial balances of Sainte-Catherine Interior Design Co. as at September 30, 2014, follow:

Instructions
(a) Prepare the adjusting journal entries that were made for the quarter.
(b) Prepare an income statement and a statement of owner's equity for the three months ending September 30 and a balance sheet at September 30.
(c) If the note bears interest at 5%, how many months has it been outstanding? Interest is payable at the beginning of the month.
TAKING IT FURTHER A friend of yours is considering purchasing the company from Catherine Larocque and asks you to comment on the company's results of operations and its financial position. Is the company performing well or not? Does the financial position appear healthy or weak? Use specific information from the financial statements to support your answer.

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SAINTE-CATHERINE INTERIOR DESIGN CO Trial Balance September 30, 2014 Unadjusted Adiusted Debit Credit Debit Credit Accounts payable Accounts receivable S 4,350 $ 4,660 6,335 $ 7,435 Accumulated depreciation- 4,500 10,000 5,000 10,000 equipment C. Larocque, capital C. Larocque, drawings Cash Depreciation expense Equipment Interest expense Interest payable Notes payable Prepaid rent Rent expense Service revenue Salaries expense 2,700 3,250 2,700 3,250 500 16,000 100 16,000 50 50 12,000 12,000 2,400 1,050 1,350 13,990 1,075 14,420 15,845 13,050 Salaries payable Supplies 940 1,750 Supplies expense Unearned revenue 675 920 $49,045 875 550 Utilities expense 610 $46,145 $46,145 $49,045