Below are three independent and unrelated errors.
a. On December 31, 2023, Wolfe-Bache Corporation failed to accrue salaries expense of $1,800. In January 2024, when it paid employees for the December 27–January 2 workweek, Wolfe-Bache made the following entry:

b. On the last day of 2023, Midwest Importers received a $90,000 prepayment from a tenant for 2024 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2024.
c. At the end of 2023, Dinkins-Lowery Corporation failed to accrue interest of $8,000 on a note receivable. At the beginning of 2024, when the company received the cash, it was recorded as interest revenue.

Required:
For each error:
1. What would be the effect of each error on the income statement and the balance sheet in the 2023 financial statements?
2. Prepare any journal entries each company should record in 2024 to correct the errors.

Transcribed Image Text:

Salaries expense.. Cash 2,520 2,520