Textbook E3-20A An accountant made the following adjustments at December 31, the end of the accounting period:

Prepaid insurance, beginning, $600. Payments for insurance during the period, $1,800. Prepaid

insurance, ending, $1,000.

Interest revenue accrued, $1,500.

Unearned service revenue, beginning, $1,200. Unearned service revenue, ending, $800.

Depreciation, $4,400.

Employees salaries owed for three days of a five-day work week; weekly payroll, $20,000.

Income before income tax, $24,000. Income tax rate is 25%.

Requirements:

Journalize the adjusting entries.

Suppose the adjustments were not made. Compute the overall overstatement or understatement of net

income as a result of the omission of these adjustments.