The Cherokee Company auditor discovered some errors. No bugs were fixed during 2020. The bugs are described below:

1. (1) Beginning inventory on January 1, 2020 was understated by $5,000.

2. (2) A two-year insurance policy purchased on April 30, 2020 in the amount of $19,200 was debited to Prepaid Insurance. No adjustment was made on December 31, 2020 or December 31, 2021.

Required:
Prepare appropriate journal entries (assume the 2021 books have not been closed). Ignore income taxes.

Answer rating: 100% (QA)

To correct the errors discovered by the auditor we need to make the appropriate journal entries for ... View the full answer