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What is the correcting journal entry

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Reference no: EM131805115

Problem

On May 1, 20X0, your company takes out a 2-year insurance policy for $2,400 a year and prepays the entire $4,800, recording the amount as an expense. At year-end 20X0, you discover an adjusting entry defers $3,600 of insurance expense.

a. What is the correcting journal entry?

b. If no correcting journal entry is recorded, how are the 20X0 income statement and balance sheet, respectively, affected?

Reference no: EM131805115

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