Wolfe-Bache failed to accrue $1,800 in salaries expense in 2023 and incorrectly recorded it as an expense in 2024. Midwest recorded a $90,000 rent prepayment as 2023 revenue instead of a liability. Dinkins-Lowery failed to accrue $8,000 in interest revenue in 2023 and incorrectly recorded it as revenue in 2024.

1. elow are three independent and unrelated errors.
On December 31, 2023, Wolfe-Bache Corporation failed to accrue salaries expense of $1,800. In
January 2024, when it paid employees for the December 27January 2 workweek, Wolfe-Bache
made the following entry:
On the last day of 2023, Midwest Importers received a $90,000 prepayment from a tenant for
2024 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered
midway through 2024.
At the end of 2023, Dinkins-Lowery Corporation failed to accrue interest of $8,000 on a note
receivable. At the beginning of 2024, when the company received the cash, it was recorded as
interest revenue.
Required:
For each error:
What would be the effect of each error on the income statement and the balance sheet in the 2023
financial statements?
Prepare any journal entries each company should record in 2024 to correct the errors.General
JournalDebitCreditSalaries expense2,520Cash2,520