The following errors occurred in the accounting records of Coral Cove, Inc.: a. The company accountant recorded

Question:

The following errors occurred in the accounting records of Coral Cove, Inc.:
a. The company accountant recorded the receipt of cash for service revenue by debiting Cash for $470 instead of the correct amount of $740. Service Revenue was also credited for $470, the incorrect amount.
b. A $225 purchase of supplies on account was recorded by debiting and crediting Supplies.
c. The company accountant recorded a $1,200 payment of rent by debiting Rent Expense for $12,000 and crediting Cash for $12,000.
d. In recording an $825 payment on account, was debited and Cash was credited.

Requirements
1. Prepare the necessary journal entries to correct each of these errors.
2. For each of the errors, determine if the error would cause net income to be overstated, understated, or unchanged.

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