Gary II income statement for January and (b) the balance sheet as a whether the items in error will be overstated or understated. 2 EX 3-14 Adjusting entry for accrued fees At the end of the current year, S8,140 of fees has been earned but has not been billed to clients. Journalize the adjusting entry to record the accrued fees. Orderstated. EX 3-7 Adjusting entries for prepaid insurance The balance in the prepaid insurance account, before adjustment at the end of the year, is $14,800. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of insurance expired during the year is $11.200; (b) the amount of unexpired insurance applicable to future periods is $3,600