CORRECTING ENTRIES AND SELF-CORRECTING ERRORS. Traverse City Properties purchased a 1-year insurance policy from Nationwide Insurance $18,000 on June 1, 19x3, with coverage beginning on the date of purchase. Traverse City’s accountant credited cash for $18,000 and debited insurance expense for $18,000. Unfortunately, the accountant forgot to make the appropriate adjustment at the end of 19x3. lol REQUIRED:

1. Assume that the accountant’s error is discovered prior to making the 19x3 closing entries. Prepare the appropriate correcting entry.

2. Disregard the assumption and entry in (1) above, and assume that the accountant’s error goes undiscovered until late in 19x4. Prepare the appropriate correcting entry.

3. Disregard the assumptions and entries in (1) and (2) above, and assume that the accountant’s error goes undiscovered until late in 19x5. Prepare the appropriate correcting entry.