P3-3A Costello Advertising SpA was founded by Pat Costello in January 2016. Presented Prepare adjusting entries and are both the adjusted and unadjusted trial balances as of December 31, 2017 financial statements LO 5, 6, 7) COSTELLO ADVERTISING SpA Trial Balance December 31, 2017 Unadjusted Adjusted Cr. 11,000 18,000 11,000 Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Interest Payable Notes Payable Unearned Service Revenue Salaries and Wages Payable 3,350 2,500 60,000 26,000 5,000 E 33,000 5,000 7,200 - Share Capital-Ordinary 20,000 20,000 Retained Earnings Dividends Service Revenue Salaries and Wages Expense Insurance Expense Interest Expense Depreciation Expense Supplies Expense Rent Expense 12,000 12,000 58,600 65,700 10,000 11,300 7,000 4,000 127,300 127,300 141,250141,250 Instructions (a) Journalize the annual adjusting entries that were made. (b) Prepare an income statement and a retained earnings statement for the year ending (b) Net income 38,450 Ending retained December 31, 2017, and a statement of financial position at December 31. earnings 31,950 Total assets 69,000 (c) Answer the following questions. (1) If the note has been outstanding 6 months, what is the annual interest rate on that note? (2) If the company paid 14,500 in salaries in 2017, what was the balance in Salaries (c) (1) 6% (2) 4,500 and Wages Payable on December 31, 2016