Powers Rental Service had the following items that require adjustment at year end.

a. Earned $9,880 of revenue from the rental of equipment for which the customer had not yet paid.

b. Interest of $650 on a note receivable has been earned but not yet received.

Required:

1. Prepare the adjusting entries needed at December 31.

2. What is the effect on the ?nancial statements if these adjusting entries are not made?