Exercise 4.7 (Algo) Preparing Various Adjusting Entries (LO4-1, LO4-2, LO4-3, LO4-4, LO4-5, LO4-6, LO4- 9) Sweeney & Allen, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31. 1. A bank loan had been obtained on December 1. Accrued interest on the loan at December 31 amounts to $1,320. No interest expense has yet been recorded. 2. Depreciation of the firm's office building is based on an estimated life of 30 years. The building was purchased four years ago for $360,000 3. Accrued, but unbilled, revenue during December amounts to $68,000. 4. On March 1, the firm paid $1,600 to renew a 12-month insurance policy. The entire amount was recorded as Prepaid Insurance. 5. The firm received $15,000 from King Biscuit Company in advance of developing a six-month marketing campaign. The entire amount was initially recorded as Unearned Revenue. At December 31, $4,000 had actually been earned by the firm. 6. The company's policy is to pay its employees every Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2.700 a. Record the necessary adjusting journal entries on December 31 b. By how much did Sweeney & Allen's net income increase or decrease as a result of the adjusting entries performed in part a? (Ignore income taxes) 1 Interest expense Interest payable 1,320 1,320 2 2 Depreciation expense - Office building 12,000 Accumulated depreciation - Office building 12,000 3 Accounts receivable 68,000 Marketing revenue earned 68,000 4 Insurance expense Prepaid insurance 2.000 2,000 5 5 Unearned revenue Marketing revenue earned 6 6 Salaries expense Salaries payable Required A Required B > 4,000 4,000 2,700 2,700 b. By how much did Sweeney & Allen's net income increase or decrease as a result of the adjusting entries performed in part a? (Ignore income taxes.) Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B By how much did Sweeney & Allen's net income increase or decrease as a result of the adjusting entries performed in part a? (Ignore income taxes.) (Round your final answer the nearest whole dollar.) Net income