PA4-2 (Algo) Analyzing and Recording Adjusting Journal Entries [LO 4-1, LO 42, 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 $720 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 Supplles account was $1,000. A physical count of supplies on December 31,2021. indicated supplies costing $350 were still on hand. c. On December 31, 2021, YY's, Garage completed repairs on one of Brokeback's trucks at a cost of $850. The amount is not yet recorded, It will be pald during Jnuary 2022 d On December 31,2021 , the company completed a contract for an out-of-state company for $8,200 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 $3,000, has: not been recorded. t. As of December 31, the company owes interest of $550 on a bank loan taken out on October 1.2021. The interest will be pald when the loan is repald on September 30,2022 . No interest has been recorded yet. g. Assume the income after the preceding adjustments but before income taxes was $35.000. The company's federal income tax rate is 30%, Compute and record income tax expense. Required: 1. Give the adjusting joutnal entry requited for each item at December 31,2021 2. If adjustments were not made each period, the financial results could be materiaily misstated Deteimine the amount by which Brokeback's net income would have been understated, or overstated, had the adjustments in requirement 1 not been made