On December 31, a business estimates depreciation on equipment used during the first year of operations to be $25,500.

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a. Journalize the adjusting entry required as of December 31. If an amount box does not require an entry, leave it blank.

Dec. 31	Accounts Payable Accumulated Depreciation-Equipment Depreciation Expense Depreciation Payable Equipment Expense	- Select -	- Select -
	Accounts Payable Accumulated Depreciation-Equipment Depreciation Expense Depreciation Payable Equipment Expense	- Select -	- Select -

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b. If the adjusting entry in (a) were omitted, which items would be erroneously stated on the income statement for the year?

Depreciation Expense	Correct Overstated Understated
Net Income	Correct Overstated Understated

If the adjusting entry in (a) were omitted, which items would be erroneously stated on the balance sheet as of December 31?

Accumulated Depreciation	Correct Overstated Understated
Total Assets	Correct Overstated Understated
Owner's equity	Correct Overstated Understated