Powers Rental Service had the following items that require adjustment at year-end. a. Earned $6,420 of revenue

Question:

Powers Rental Service had the following items that require adjustment at year-end.
a. Earned $6,420 of revenue from the rental of equipment for which the customer had not yet paid.
b. Interest of $400 on a note receivable has been earned but not yet received.

Required:
1. Prepare the adjusting entries needed at December 31.
2. What is the effect on the if these adjusting entries are not made?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...