For each of the items below, need necessary correcting journal entries. The current year is 2014 and the books are still open. Any errors noted, including for prior years, were discovered at the end of 2014.

 

1. On January 1, 2013 space was rented to a tenant. On that day, the following amounts were received from the tenant and recorded as rent revenue:

 

January, 2013 rent $4,000

Refundable damage deposit 5,000

 

2. On July 1, 2013 rented additional space to a tenant. Two years of rent ($12,000) was received on that day and the entire amount was credited to rent revenue.

 

3. Office wages were not accrued at year-end. These amounts were recorded when paid in the following year.

 

2012: $1,900 2013: $2,900

 

4. Sales salaries were not accrued at year-end. These amounts were recorded when paid in the following year.

 

2012: $3,100 2013: $1,600 2014: $ 700

 

5. On February 1, 2012, $4,800 was paid for a 4 year insurance policy. The payment was debited to prepaid insurance. At December 31, 2014 the prepaid ledger account continues to show the $4,800.

 

6. A second insurance policy, covering a 3 year period, was taken out on July 1, 2012. The $21,600 paid was expensed when paid for.

 

7. Inventory at December 31, 2012 is understated by $6,000. Inventory at December 31, 2014 is overstated by $14,000.

 

8. A $20,000 inventory purchase made in December, 2013 was recorded as "purchases" in January, 2014. The goods were correctly included in 2013 ending inventory.

 

9. A $50,000 machine was expensed on July 1, 2012 when bought. It has a 5 year life and no residual value. The company uses the straight-line method to record amortization on all capital assets.

 

10. A $4,800 repair expense incurred on October 1, 2013 was incorrectly capitalized on that date. The company recorded amortization using a 4 year life (no residual).

 

11. Store supplies were expensed when purchased. Store supplies remaining in stock at each year end are as follows:

 

2012: $1,300 2013: $ 300 2014: $2,700