Accrued Expense Adjusting Entries}

Moreau Manufacturing Ltd. had the following items that require adjustment at year-end.

a. Salaries of \(\$ 4,980\) that were earned in December are unrecorded and unpaid.

b. Used \(\$ 2,430\) of utilities in December, which are unrecorded and unpaid.

c. Interest of \(\$ 1,575\) on a note payable has not been recorded or paid.

\section*{Required:}

1. Prepare the adjusting entries needed at December 31 .

2. What is the effect on the financial statements if these adjusting entries are not made?

\section*{Cornerstone Exercise