The Jessica Co. has the following errors on its books as of December 31, 2018. The books for 2018 have not yet been closed. a. On January 1, 2016, a machine had been purchased for $6,500. The machine had an estimated life of five years, but it was expensed in error. Straight-line depreciation with no salvage value should have been used.
b. On January 1, 2017, the company bought a four-year insurance policy for $800 and immediately charged the full premium to expense.
Required:
Prepare journal entries to correct these errors on December 31, 2018. Ignore income taxes.

Answer and Explanation:

The journal entry is given below;

a. Machine or equipment  $6,500

        To Accumulated depreciation ($6,500 × 3 ÷ 5) $3,900

        To Retained earnings $2,600

(being the correction of the error is recorded)

b. Prepaid insurance Dr ($800 ÷ 4 × 2 ) $400

        To Retained earnings $400

(being the correction of the error is recorded)

These two entries should be recorded to correct the given errors

explanation:

a gas is not used in hydraulic machines as the fluid because gas is easily compressible and so if a gas is used, the energy would mostly go into compressing a gas. therefore a liquid is used in hydraulic machines as the fluid.

answer; dogs;