On a recent trip to Ireland. Ian O'Shea, sales manager of Eln, Inc.. took his wife along at company expense. Martha Gibney, vice president of sales and O'Shea's boss, thought his travel and entertainment expenses seemed excessive. Gibney approved the reimbursement. however, because she owed O'Shea a favor. Gibney, well aware that the company president reviews all expenses recorded in the cash payments journal, had the accountant record O'Shea's wile's expenses in the general journal as follows: Sales Promotion Expense Cash 3,500 3,500 Garcia Sales Leewright, Inc. Date Item Jrnl. Ref. Debit Credit Balance Jrnl. Date Item Ref. Debit Credit Balance Apr. 1 Balance 440 Apr. 1 Balance 2.378 3 CR.8 440 -0- 15 25 29 SS 5.6 3,655 3.655 29 5.6 2.635 CR.8 5,518 2.883* 2.635 5.6 1.123 4,778 Sally Jones *Cash receipt did not occur within the discount period. Jacques LeHavre Date Jrnl. Item Jrnl. Apr. 1 Balance Ref. Debit Credit Balance Date Item Ref. Debit Credit Balance. 1.096 Apr. 8 Balance 5.6 2.378 2.378 5 11 21 CR.8 5.6 CR.8 1,096 -0- 16 5.6 903 3,281 396 396 18 CR.8 2.378 903 396 -0- 19 3.5 221 682 24 5.6 5.108 27 CR.8 682 -0- Ethical Issue (continued) Required 1. Does recording the transaction in the general journal rather than in the cash payments jour- nal affect the amounts of cash and total expenses reported in the financial statements? 2. Why did O'Shea want this transaction recorded in the general journal? 3. What is the ethical issue in this situation? What role does accounting play in this issue?