Instructions Faraday Electronic Service repairs stereos and DVD players. During 2019, Faraday engaged in the following activities: a. On September 1, Faraday paid Wausau Insurance $4,860 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance. b. At December 31, Faraday estimates that $1,520 of utility costs are unrecorded and unpaid. c. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $1,440 is unpaid and unrecorded at December 31. d. In late October, Faraday agreed to become the sponsor for the sports segment of the evening news program on a local television station. The station billed Faraday $4,350 for 3 months' sponsorshipNovember 2019, December 2019, and January 2020in advance. When these payments were made, Faraday debited prepaid advertising. At December 31, 2 months' advertising has been used and 1 month remains unused. Required: 1. Prepare adjusting entries at December 31 for these four activities. 2. Conceptual Connection: What would be the effect on expenses if the adjusting entries were not made? General Journal Sha PAGE 1 Score: 105/141 GENERAL JOURNAL IMPACT ON FINANCIAL STATEMENTS BALANCE SHEET INCOME STATEMENT DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY REVENUE EXPENSESNET INCOME Adjusting Entries Dec 31 Insurance Expense 1,620.00 1,620.00 1,520.00 1,520.00 Prepaid Insurance Dec. 31. Utilities Expense Utilities Payable Dec. 31 Rent Expense Rent Payable Dec. 31 Advertising Expense Prepaid Advertising 1,440.00 1,440.00 4,350.00 4,350.00 Final Question Shaded cells have feedback. 2 Conceptual Connection: What would be the effect on expenses if the adjusting entries were not made? a. If this entry were not made, expenses would be understated and assets would be overstated Additionally, net income and stockholders' equity would be overstated Points b. If this entry were not made, expenses would liabilities would Additionally, net income and stockholders' equity would Points c. If this entry were not made, expenses would liabilities would Additionally, net income and stockholders' equity would Points d. If this entry were not made, expenses would assets would Additionally, net income and stockholders' equity would Points Additional Instruction Cumulative effect on expenses