Please choose one category of Adjusting Entries (Prepaid Expenses (including Depreciation), Unearned Revenue, Accrued Expenses and Accrued Revenue). Within that category, choose one example of an adjusting entry that you might make in a company. Include an example of an unadjusted account posting and an adjusted account posting.

1. Please describe why this adjusting entry needs to be made.

2. Please describe the accounts that are affected by making the adjusting entry.

3. Please describe the impact this adjusting entry has on the Income Statement and the Balance Sheet.