At December 31, the unadjusted trial balance of H&R Tacks reports Supplies of $9,900 and Supplies Expense of $0. On December 31, supplies costing $8,150 are on hand.

Required:

1. Prepare the adjusting journal entry on December 31.

2. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance.