Question: Exercise 20-22 (Algo) Error correction; accrued interest on bonds [LO20-6] At the end of 2020, Majors Furniture Company failed to accrue $68,500 of interest expense

Exercise 20-22 (Algo) Error correction; accrued interest on bonds [LO20-6]

At the end of 2020, Majors Furniture Company failed to accrue $68,500 of interest expense that accrued during the last five months of 2020 on bonds payable. The bonds mature in 2032. The discount on the bonds is amortized by the straight-line method. The following entry was recorded on February 1, 2021, when the semiannual interest was paid:


Interest expense	82,200
Discount on bonds payable		2,700
Cash		79,500

Required: 1-a. Prepare any journal entries necessary to correct the error, as well as any adjusting entry for 2021 related to the situation described. (Ignore income taxes.) 1-b. Prepare the journal entries that should have been recorded, if done correctly to start.

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