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Ka Ho Limited provides repair and maintenance services. The annual reporting period ends 31 December. The unadjusted trial balance on 31 December 2020 are as follows: Ka Ho Limited Unadjusted Trial Balance on 31 December 2020 Debit Credit $ $ Cash 1,000,000 Accounts receivable 60,000 Supplies 5,000 Equipment 30,000 Accumulated depreciation on 3,000 equipment Prepaid rent expense 60,000 Notes payable 30,000 Service revenue 500,000 Accounts payable 40,000 Wages expense 10,000 Rent expense 20,000 Supplies expense 1,000 Unearned revenue 12,000 Investment 20,000 Common stock (8,000 shares, $0.5 4,000 par value) Additional paid-in capital Retained earnings Totals 80,000 537.000 1,206,000 1,206,000 Additional information: 1 Ka Ho Limited had signed notes payable of $20,000 on 1 July 2020. The interest and principal of the notes payable will be due on 31 June 2021. Interest rate is 5% per annum. $10,000 of accounts payable had mistakenly been recorded in notes payable. There is no repayment in 2020 for the notes payable. 2 Prepaid rent expense of $60,000 was recorded on 30 September 2020 for the rent covering the period from 1 October 2020 to 30 September 2021. 3 Depreciation for the year on the equipment was $1,000. 4 Supplies on hand amounted to $2,000 at the end of 2020. 5 $12,000 were recorded in service revenue for repair and maintenance services to be performed in January 2021. 6 Unearned revenue of $24,000 had mistakenly been recorded in accounts payable. 7 Except for additional information 5, all unearned revenues on the record were for monthly repair and maintenance services covering the period from 1 Oct 2020 to 30 September 2021. 8 At the end of 2020, employees earned wages of $3,000, which will be paid on the next payroll date in January 2021. Required: a. Prepare journal entries to adjust the accounting records for additional information 1- 8. Prepare income statement for the year ended 31 December 2020. b

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