Exercise 20-23 (Algo) Error correction; three errors [LO20-6]

Below are three independent and unrelated errors.

1. On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $2,300. In January 2021, when it paid employees for the December 27January 2 workweek, Wolfe-Bache made the following entry:

Salaries expense	2,300
Cash		2,300

2. On the last day of 2020, Midwest Importers received a $100,000 prepayment from a tenant for 2021 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2021.
3. At the end of 2020, Dinkins-Lowery Corporation failed to accrue interest of $9,000 on a note receivable. At the beginning of 2021, 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 2020 financial statements?

error A

income Statement	?	?
balance sheet	?	?

error B

income Statement	?	?
balance sheet	?	?

error C

income Statement	?	?
balance sheet	?	?

2. Prepare any journal entries each company should record in 2021 to correct the errors.