Question: The Cherokee Company auditor discovered some errors. No bugs were fixed during 2020. The bugs are described below: (1) Beginning inventory on January 1, 2020

The Cherokee Company auditor discovered some errors. No bugs were fixed during 2020. The bugs are described below:

  1. (1) Beginning inventory on January 1, 2020 was understated by $5,000.

  2. (2) A two-year insurance policy purchased on April 30, 2020 in the amount of $19,200 was debited to Prepaid Insurance. No adjustment was made on December 31, 2020 or December 31, 2021.


Required:
Prepare appropriate journal entries (assume the 2021 books have not been closed). Ignore income taxes.

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