ACCRUED REVENUE ADJUSTING ENTRIES 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:

. Prepare the adjusting entries needed at December 31.

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