Consider the following transactions for Liner Company:

a. Received a \(\$ 220\) utility bill for electricity usage in December to be paid in January 2012.

b. Owed wages to 10 employees who worked three days at \(\$ 150\) each per day at the end of December 2011. The company will pay employees at the end of the first week of January 2012.

c. On September 1, 2011, loaned \(\$ 3,000\) to an officer who will repay the loan in one year at an annual interest rate of 12 percent.

Required:

1. Prepare the adjusting entries required for the year ended December 31,2011 , using the process illustrated in the chapter.

2. For each of the transactions above, indicate the amounts and direction of effects of the adjusting entry on the elements of the statement of financial position and income statement. Use the following format: + for increase, - for decrease, and NE for no effect.

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Statement of Financial Position Transaction Assets a. b. C. Liabilities Shareholders Equity Revenues Income Statement Expenses Profit