On December 31, a business estimates depreciation on equipment used during the first year of operations to be $13,900.

	Required:
	a. Journalize the adjusting entry required as of December 31. Refer to the Chart of Accounts for exact wording of account titles.
	b. If the adjusting entry in (a) were omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of December 31?

CHART OF ACCOUNTS

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Supplies
14	Prepaid Insurance
15	Land
16	Equipment
17	Accumulated Depreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Unearned Fees
23	Salaries Payable
24	Taxes Payable

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends

	REVENUE
41	Fees Earned

	EXPENSES
51	Advertising Expense
52	Insurance Expense
53	Rent Expense
54	Salary Expense
55	Supplies Expense
56	Utilities Expense
57	Depreciation Expense
59	Miscellaneous Expense

a. Journalize the adjusting entry required as of December 31. Refer to the Chart of Accounts for exact wording of account titles.