Brief Exercise 3-32 Adjusting Entries-Deferrals Tyndal Company had the following items that required adjustment at December 31, 2019. Required: 1. Prepare the adjusting entries needed at December 31. a. Purchased equipment for $40,000 on January 1, 2019. Tyndal estimates annual depreciation expense to be $3,100. Dec. 31 Depreciation Expense 3,100 Accumulated Depreciation 3,100 (Record depreciation on equipment) Feedback Check My Work b. Paid $2,400 for a 2-year insurance policy on July 1, 2019. The amount was debited to Prepaid Insurance when paid. Dec. 31 Insurance Expense Prepaid Insurance (Record use of prepaid insurance) C. Collected $1,200 rent for the period December 1, 2019 to March 30, 2020. The amount was credited to Unearned Service Revenue when received. Dec. 31 Unearned Service Revenue Service Revenue (Record earned revenue) Feedback Check My Work 2. Conceptual Connection: What is the effect on the financial statements if these adjusting entries were not made? Assets will be overstated by $ Liabilities will be Overstated by $ Feedback Check My Work