1. A bank loan had been obtained on Dec 1. Accrued interest on the loan at Dec 31 amount of $1200. No interest expense has yet been recorded.
2. Depreciation of the firm office building is based on an estimated life of 25 years. The building was purchased in 2005 for $330,000
3. Accrued but unbilled, revenue during Dec amounts to $64,000
4. On March 1, the firm paid $1,800 to renew a 12 month insurance policy. The entire amount was recorded as Prepaid Insurance
5. The firm received $14,000 from King Biscuit company in advance of development a six-month marketing campaign. The entire amount was initially recorded as Unearned Revenue. A December 31, $3,500 had actually been earned by the firm
a. Record the necessary adjusting journal entries on December 31, 2009.
b. By how much did Sweeny & Associates’ net income increase or decrease as a result of the adjusting entries performed in part a? (ignore income taxes).