At the end of 2015, Majors Furniture Company failed to accrue $61,000 of interest expense that accrued during the last five months of 2015 on bonds payable. The bonds mature in 2027. The discount on the bonds is amortized by the straight-line method. The following entry was recorded on February 1, 2016, when the semiannual interest was paid: Interest expense ......................................................................................................... 73,200 Discount on bonds payable ..................................................................................... 1,200 Cash ......................................................................................................................... 72,000 Required: Prepare any journal entry necessary to correct the error as well as any adjusting entry for 2016 related to the situation described. (Ignore income taxes.)
At the end of 2015, Majors Furniture Company failed to accrue $61,000 of interest expense that accrued during the last five months of 2015 on bonds payable. The bonds mature in 2027. The discount on the bonds is amortized by the straight-line method. The following entry was recorded on February 1, 2016, when the semiannual interest was paid: Interest expense ......................................................................................................... 73,200 Discount on bonds payable ..................................................................................... 1,200 Cash ......................................................................................................................... 72,000 Required: Prepare any
