Refer to the information in E3-8.
a. Equipment costing $36,000 is purchased at the beginning of the year for cash.
Depreciation on the equipment is $6,000 per year.
b. On June 30, the company lends its chief financial officer $40,000; principal and interest at 6% are due in one year.
c. On October 1, the company receives $12,000 from a customer for a one-year property insurance policy. Unearned Revenue is credited.
Required:
For each of the adjustments in E3-8, indicate by how much net income in the income statement is higher or lower if the adjustment is not recorded?