Cherokee Company's auditor discovered certain errors in 2008 when making adjusting entries for 2008. Make the suitable journal entries to be made in 2008 to accurate these errors so that 2008 total income and retained earnings are correct.
1) A machine with a 5-year life was bought on January 1, 2007. The machine cost $20,000 and has no expected salvage value. No depreciation was taken in 2007 or 2008. Suppose that the straight-line method for depreciation.
2) A two-year insurance policy bought on April 30, 2007, in the amount of $24,000 was debited to Prepaid Insurance. No adjustment was made on December 31, 2007, or on December 31, 2008.