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At the end of 2020, Majors Furniture Company falled to accrue $61,500 of Interest expense that accrued during the last five months of 2020 on bonds payable. The bonds mature in 2032. The discount on the bonds is amortized by the straight-line method. The following entry was recorded on February 1, 2021, when the semiannual Interest was pald: Interest expense Discount on bonds payable Cash Required: 1-a. Prepare any journal entries necessary to correct the error, as well as any adjusting entry for 2021 related to the situation described. (Ignore Income taxes.) 1-b. Prepare the journal entries that should have been recorded, if done correctly to start. Req 1A Complete this question by entering your answers in the tabs below. View transaction list Req 18 Prepare any journal entries necessary to correct the error, as well as any adjusting entry for 2021 related to the situation described. (Ignore income taxes.) (Do not round intermediate calculations and round your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet < 2 1 Record the entry to correct the error. 73,800 Note: Enter debits before credits. Event 1 Record entry 1,300 72,500 General Journal Clear entry Debit Credit View general journal >

At the end of 2020, Majors Furniture Company falled to accrue $61,500 of Interest expense that accrued during the last five months of 2020 on bonds payable. The bonds mature in 2032. The discount on the bonds is amortized by the straight-line method. The following entry was recorded on February 1, 2021, when the semiannual Interest was pald: Interest expense Discount on bonds payable Cash Required: 1-a. Prepare any journal entries necessary to correct the error, as well as any adjusting entry for 2021 related to the situation described. (Ignore Income taxes.) 1-b. Prepare the journal entries that should have been recorded, if done correctly to start. Req 1A Complete this question by entering your answers in the tabs below. View transaction list Req 18 Prepare any journal entries necessary to correct the error, as well as any adjusting entry for 2021 related to the situation described. (Ignore income taxes.) (Do not round intermediate calculations and round your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet < 2 1 Record the entry to correct the error. 73,800 Note: Enter debits before credits. Event 1 Record entry 1,300 72,500 General Journal Clear entry Debit Credit View general journal >

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Educational Content: Accounting Adjustments and Journal Entries** **Scenario Overview:** At the end of 2020, Majors Furniture Company failed to accrue $61,500 of interest expense on bonds payable. These bonds mature in 2032, and the discount is amortized using the straight-line method. The following entry was recorded on February 1, 2021, when the semiannual interest was paid: - **Interest Expense:** Debit $73,800 - **Discount on Bonds Payable:** Debit $1,300 - **Cash:** Credit $72,500 **Required Tasks:** **1-a.** Prepare any necessary journal entries to correct the error and adjust for 2021, ignoring income taxes. **1-b.** Prepare the journal entries that should have been recorded initially. **Journal Entry Guidelines:** - Enter debits before credits. **Interface for Input:** - A tabbed section labeled "Req 1A" and "Req 1B" to input responses. - A journal entry worksheet with fields for event, general journal entries, debits, and credits. - Buttons for recording, clearing, and viewing entries. **Action Steps:** 1. **Identify error correction:** Analyze the missing entry and record it accurately, adjusting the accounts for the specified error. 2. **Adjust entries for 2021:** Ensure all journal entries are accurate for the fiscal year, reflecting adjustments based on the situation. 3. **Review prior entries:** Confirm the initial entries align with the intended financial statements had the journal entries been recorded correctly. In this exercise, students will gain practical experience handling errors in financial accounting and learning to effectively utilize journal entries for adjustments.
Transcribed Image Text:**Educational Content: Accounting Adjustments and Journal Entries** **Scenario Overview:** At the end of 2020, Majors Furniture Company failed to accrue $61,500 of interest expense on bonds payable. These bonds mature in 2032, and the discount is amortized using the straight-line method. The following entry was recorded on February 1, 2021, when the semiannual interest was paid: - **Interest Expense:** Debit $73,800 - **Discount on Bonds Payable:** Debit $1,300 - **Cash:** Credit $72,500 **Required Tasks:** **1-a.** Prepare any necessary journal entries to correct the error and adjust for 2021, ignoring income taxes. **1-b.** Prepare the journal entries that should have been recorded initially. **Journal Entry Guidelines:** - Enter debits before credits. **Interface for Input:** - A tabbed section labeled "Req 1A" and "Req 1B" to input responses. - A journal entry worksheet with fields for event, general journal entries, debits, and credits. - Buttons for recording, clearing, and viewing entries. **Action Steps:** 1. **Identify error correction:** Analyze the missing entry and record it accurately, adjusting the accounts for the specified error. 2. **Adjust entries for 2021:** Ensure all journal entries are accurate for the fiscal year, reflecting adjustments based on the situation. 3. **Review prior entries:** Confirm the initial entries align with the intended financial statements had the journal entries been recorded correctly. In this exercise, students will gain practical experience handling errors in financial accounting and learning to effectively utilize journal entries for adjustments.
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