Answer:
-$3,320
Explanation:
The information is missing, so I looked for a similar question:
"a. On July 1, 2021, purchased $14,000 of IBM Corporation bonds at face value. The bonds pay interest twice a year on January 1 and July 1. The annual interest rate is 10%. b. Vito's depreciable equipment has a cost of $27,200, a four-year life, and no salvage value. The equipment was purchased in 2019. The straight-line depreciation method is used. c. On November 1, 2021, the bar area was leased to Jack Donaldson for one year. Vito's received $8,400 representing the first six months' rent and credited deferred rent revenue. d. On April 1, 2021, the company paid $3,360 for a two-year fire and liability Insurance policy and debited Insurance expense. e. On October 1, 2021, the company borrowed $28,000 from a local bank and signed a note. Principal and Interest at 10% will be paid on September 30, 2022. At year-end, there is a $2,200 debit balance in the supplies (asset) account. Only $780 of supplies remain on hand."
a)
Dr Interest receivable 700
Cr Interest revenue 700
b)
Dr Depreciation expense 6,800
Cr Accumulated depreciation: equipment 6,800
c)
Dr Deferred rent revenue 2,800
Cr Rent revenue 2,800
d)
Dr Prepaid insurance 2,100
Cr Insurance expense 2,100
e)
Dr Interest expense 700
Cr Interest payable 700
f)
Dr Supplies expense 1,420
Cr Supplies 1,420
The income statement must be adjusted in the following way:
+ Interest revenue $700
+ Rent revenue $2,800
+ Adjustment to insurance expense $2,100
- Depreciation expense -$6,800
- Interest expense -$700
- Supplies expense -$1,420
Net adjustments = -$3,320 (income statement was overstated)
