Cherokee Company's auditor discovered some errors. No errors were corrected during 2015. The errors are described as follows:

(1.)	Beginning inventory on January 1, 2015, was understated by $5,000.
(2.)	A two-year insurance policy purchased on April 30, 2015, in the amount of $18,600 was debited to Prepaid Insurance. No adjustment was made on December 31, 2015, or on December 31, 2016.

Required:

Prepare appropriate journal entries (assume the 2016 books have not been closed). Ignore income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Transaction List:

1

Beginning inventory on January 1, 2015, was understated by $5,000.

2

A two-year insurance policy purchased on April 30, 2015, in the amount of $18,600 was debited to Prepaid Insurance. No adjustment was made on December 31, 2015, or on December 31, 2016.