Questions 6 and 7 refer to the following information: X Company, a merchandiser, prepares monthly financial statements. On June 30, its accountant made adjusting entries to record:

• $5,543 of June interest on a bank loan to be paid in July
• $1,895 of wages that were earned by employees in June but to be paid in July
• $4,577 of rent and insurance for June that was prepaid on June 1 but had expired
• $3,961 of depreciation on factory equipment
• a $2,655 June utility bill received in June, to be paid in July
• a shipment of products in June for which customers paid $1,010 in May

6. What would be the effect of these entries on total equities in June?

Incorrect.

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