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Question: On May 3, it was discovered that the following errors took place in journalizing and posting transactions:

a. Insurance of $18,000 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance.

b. Dividends of $10,000 were recorded as a debit to Wages Expense and a credit to Cash.

Journalize the entries on May 3 to correct the errors. Use two entries to correct the error described in A. (That is, record an entry to reverse the incorrect entry and a second entry to record the correct entry.) Refer to the Chart of Accounts for exact wording of aount titles.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92642433

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