On August 1, the Hwang Corp. purchased a photocopy machine for $8,000. The estimated annual depreciation on the machine amounts to $1,680. If the company's year-end is December 31 and adjusting entries have not previously been made, the appropriate adjusting journal entry to be made on December 31 would be to debit Depreciation Expense $700; credit Equipment 5700 Odebit Depreciation Expense $700; credit Accumulated Depreciation $700. O debit Depreciation Expense $1,680; credit Accumulated Depreciation $1,680. O debit Depreciation Expense $140, credit Accumulated Depreciation $140. At the end of the current year, the required adjusting entry for depreciation on equipment was omitted. Which of the following statements is true regarding the current year's financial statements? O Retained earnings will be understated. Net income will be overstated. O The statement of financial position and statement of income will be misstated but the statement of changes in equity will be correct. O Total assets will be understated. Prepaid expenses are O incurred but not yet paid or recorded. paid and recorded in an asset account after they are used or consumed. O incurred and already paid or recorded. paid and recorded in an asset account before they are used or consumed. ABC Maintenance Inc. has a $500 monthly contract with Toys Inc. for general maintenance services. ABC Maintenance Inc. invoices Toys Inc on the first of the month for the services that it performed in the previous month. Toys Inc must then pay for these services by the 15th of the following month ABC Maintenance Inc has a June 30 year end and prepares adjusting entries monthly. Select the proper adjusting entry required on June 30th by ABC Maintenance, O Debit Service Revenue $500 and credit Accounts Receivable $500 O Debit Account Receivable $500 and credit Service Revenue $500 Debit Cash $500 and credit Deferred Revenue $500 Debit Cash $500 and credit Accounts Receivable $500