PA$4-2($Algo$)$ Analyzing and Recording Adjusting Journal Entries $[$LO $4-1,$ LO $4-2,$ LO $4-6]$

Brokeback Towing Company is at the end of its accounting year, December $31,2021.$ The following data that must be considered were developed from the company's records and related documents:

a$.$ On July $1,2021,$ a two$-$year insurance premium on equipment in the amount of $$792$ was paid and debited in full to Prepaid Insurance on that date. Coverage began on July $1.$

b$.$ At the end of $2021,$ the unadjusted balance in the Supplies account was $$1,000.$ A physical count of supplies on December $31,2021,$ indicated supplies costing $$380$ were still on hand.

c$.$ On December $31,2021,$ YY$\text{'}$s Garage completed repairs on one of Brokeback's trucks at a cost of $$880.$ The amount is not yet recorded. It will be paid during January $2022.$

d$.$ On December $31,2021,$ the company completed a contract for an out$-$of$-$state company for $$8,350$ payable by the customer within $30$ days. No cash has been collected and no journal entry has been made for this transaction.

e$.$ On July $1,2021,$ the company purchased a new hauling van. Depreciation for July$-$December $2021,$ estimated to total $$3,150,$ has not been recorded.

f$.$ As of December $31,$ the company owes interest of $$580$ on a bank loan taken out on October $1,2021.$ The interest will be paid when the loan is repaid on September $30,2022.$ No interest has been recorded yet.

g$.$ Assume the income after the preceding adjustments but before income taxes was $$38,000.$ The company's federal income tax rate is $25\%.$ Compute and record income tax expense.

Required:

Give the adjusting journal entry required for each item at December $31,2021.$

If adjustments were not made each period, the financial results could be materially misstated. Determine the amount by which Brokeback's net income would have been understated, or overstated, had the adjustments in requirement $1$ not been made.

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Required $1$

Give the adjusting journal entry required for each item at December $31,2021.($If no entry is required for a transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.$)$