Credit Below is the trial balance of Ernst Ltd. at December 31, 2019 Ernst Ltd. Trial Balance December 31, 2019 Account Debit Cash $ 50,000 Accounts Receivable 20,000 Prepaid Insurance 2,400 Supplies 4.000 Equipment 48,000 Accumulated Depreciation- Equipment Notes Payable Unearned revenue Share Capital- Ordinary Dividends 2.000 Retained Earnings Service Revenue Salaries expense 10,000 Rent expense Advertising expense 4.000 Total $ 146,400 4,000 4,400 3,000 70,000 25,000 40,000 6,000 $ 146,400 Other data: 1. Supplies on hand at December 31 are $1,500. 2. A utility bill for $500 has not been recorded and will not be paid until next month. (The appropriate liability account here is accounts payable) 3. The insurance policy was purchased on December 1, 2019 and is for a year. 4. $2,500 of unearned service revenue is recognized for services performed at the end of the month. 5. The interest accrued but not yet recorded or paid on the note payable is $100 for the month of December. 6. The equipment has a 4-year period with no residual value. It is being depreciated at $1,000 per month for 48 months. 7. Invoices representing $3,000 of services performed during the month have not been recorded as of December 31. Instructions: 1) Prepare the adjusting entries for the month of December. 2) If each of the above adjustments was not made, show the effect on net income, shareholders equity, assets and liabilities accordingly, by forming a table as shown: Adjustment no. Type of Net Equity Assets Liabilities adjustment income 1. 2. 3. 4. 5. 6. 7. Use the terms Overstated and Understated. Use N/A for any item that won't be affected by the adjustment. 3) Post the adjusting entries 4) Prepare an adjusted trial balance 5) After preparing the adjusted trial balance, prepare the necessary closing entries on December 31, 2019. 6) Post the closing entries 7) Prepare the Post-Closing Trial Balance