Teal Corporation prepares annual financial statements and therefore adjusts its accounts on December 31, 2020. The following information is available for year 2020:

a. Teal purchasedsupplies of $2,700 in January.At December 31, there was $1,500 of supplies on hand.

b.The $17,000note payable was issued on September 1, 2020. It is a 12%, 6-month note, so the interest for each month is 17,000*12%*(1/12)= $170. The company does not pay interest until the due date (Mar 1^st, 2021).

c.Tealpaid fora one-year insurance policy of $1,800. Coverage began onMarch 1, 2020.

d.At December 31, Tealdetermines that it has performed serviceof $1,000for Blue Corporation, although the company has not billed Blue Corporation yet.

Required:

(1)Journalize the appropriate adjusting entries on December 31,2020.

(2)Indicate the direction of effects (Increase, Decrease, or No Effect) of each adjusting entry on the three elements of the Balance Sheet (Assets, Liabilities, and SE).