Reference no: EM132463706

Point 1: On December 10, 2021, Jamesway received a $4,800 payment from a customer for services begun on that date and which were completed by December 31, 2021. Deferred service revenue was credited.

Point 2: On December 1, 2021, the company paid a local radio station $3,600 for 40 radio ads that were to be aired, 20 per month, throughout December and January. Prepaid advertising was debited.

Point 3: Employee salaries for the month of December totaling $24,000 will be paid on January 7, 2022.

Point 4: On August 31, 2021, Jamesway borrowed $50,000 from a local bank. A note was signed with principal and 9% interest to be paid on August 31, 2022.

Question 1: If none of the adjusting journal entries were recorded, would assets, liabilities, and shareholders' equity on the 12/31/2021 balance sheet be higher or lower and by how much?

Assets: HIGHER or LOWER by _____

Liabilities: HIGHER or LOWER by _____

Shareholders' Equity: HIGHER or LOWER by _____