Descriptions of transactions and how they were recorded follow for October, 2012 for Ausley Acoustics, Inc.
a. Received $1,500 cash from customer for three months of service beginning October 1, 2012, and ending December 31, 2012. The company recorded a $1,500 debit to Cash and a $1,500 credit to Unearned service revenue.
b. Employees are paid $1,000 every Friday for the five-day work week. October 31, 2012, is on Wednesday.
c. The company pays $240 on October 1 for their six-month auto insurance policy. The company recorded a $240 debit to Prepaid insurance and a $240 credit to Cash.
d. The company purchased office furniture for $6,300 on January 2, 2012. The company recorded a $6,300 debit to Office furniture and a $6,300 credit to Accounts payable. Annual depreciation for the furniture is $900.
e. The company began October with $50 of supplies on hand. On October 10, the company purchased supplies on account of $100. The company recorded a $100 debit to Supplies and a $100 credit to Accounts payable. The company used $120 of supplies during October.
f. The company received its electric bill on October 30 for $125 but did not pay it until November 10. On November 10, it recorded a $125 debit to Utilities expense and a $125 credit to Cash.
g. The company paid November€™s rent on October 30 of $800. On October 30, the company recorded an $800 debit to Rent expense and an $800 credit to Cash.
Requirement
1. Indicate if an adjusting entry is needed for each item on October 31 and why the entry is needed (i.e., an asset or liability account is over/understated). Indicate which specific account on the balance sheet is misstated. Finally, indicate the correct balance that should appear in the balance sheet account after the adjustment is made. Use the following table guide. Item a is completed as anexample:

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Adjustment needed? Balance sheet Correct balance on October 31 Asset/ Over-/ Understated? Item account Liability Overstated Uncarned service revenue a. $1,000 Yes