At the end of 2016, Framber Company received $8,000 as a prepayment for renting a building to a tenant during 2017. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2016 instead of 2017. 

Required: 

 

 

 

Upon discovery of this error in 2017, what correcting journal entry will Framber make? Ignore income taxes. 

 

 

CHART OF ACCOUNTS 

 

 

Framber Company 

 

 

General Ledger 

 

 

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
189	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

 

 

 

 

 

 

 

	REVENUE
411	Sales Revenue
421	Rent Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

 

 

 

 

 

 

Prepare the necessary entry on December 31, 2017 to correct the prior period error ignoring income taxes. Additional Instruction 

PAGE 1 

GENERAL JOURNAL 

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2

 

Answer rating: 100% (QA)

To correct the prior period error made by Framber Company in recording the prepayment for renti... View the full answer