Exercise 206 As Mei Smith was doing his year-end accounting, he noticed that the

Question

Exercise 206 As Mei Smith was doing his year-end accounting, he noticed that the bookkeeper had made errors in recording several transactions. The erroneous transactions are as follows: (a) A check for $700 was issued for goods previously purchased on account. The bookkeeper debited Accounts Receivable and credited Cash for $700. (b) A check for $180 was received as payment on account. The bookkeeper debited Accounts Payable for $810 and credited Accounts Receivable for $810. e) When making the entry to record the year's depreclation expense, the bookkeeper debited Accumulated Depreciation-Equipment for $1,000 and credited Cash for $1,000. (d) When accruing interest on a note payable, the bookkeeper debited Interest Receivable for $200 and credited Interest Payable for $200. Prepare the appropriate correcting entries. (Credit account titles are automa tically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit alicr 1 2000 2018 Jhn Wiley&Sons;, In. Al Rights Reserved. A Division of 30hn Wiley&Sons; Inc search

Explanation / Answer

Solution: Account titles and Explanation Debit Credit a. Accounts Payable $700 Accounts Receivable $700 Working Notes: Account titles and Explanation Debit Credit Entry done   Accounts Receivable 700 cash 700 Correct entry Accounts Payable 700 cash 700 b. Account titles and Explanation Debit Credit cash 180 Accounts Receivable 630 Accounts Payable 810 Working Notes: Account titles and Explanation Debit Credit Entry done   Accounts Payable 810 Accounts Receivable 810 Correct entry cash 180 Accounts Receivable 180 Account titles and Explanation Debit Credit c. Cash 1000 Depreciation Expense 1000 Accumulated Depreciation 2000 Working Notes: Account titles and Explanation Debit Credit Entry done   Accumulated Depreciation 1000 Cash 1000 Correct entry Depreciation Expense 1000 Accumulated Depreciation 1000 Account titles and Explanation Debit Credit d. Interest Expense 200 Interest Receivable 200 Working Notes: Account titles and Explanation Debit Credit Entry done   Interest Receivable 200 Interest payable 200 Correct entry Interest Expense 200 Interest payable 200 Please feel free to ask if anything about above solution in comment section of the question.

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