2 Poir In year 4, internal auditors discovered that Cistern Displays, Inc., had debited an expense account for the $400,000 cost of equipment purchased on January 1, year 1. The equipment's life was expected to be five years with no residual value. Straight-line depreciation is used by Cistern. Required: 1. Prepare the appropriate correcting entry assuming the error was discovered in year 4 before the adjusting and closing entries. (Ignore income taxes.) 2. Assume the error was discovered in year 6 after the year 5 financial statements are issued. Prepare the appropriate correcting entry. Soon 2 0 0'000 2 Poir In year 4, internal auditors discovered that Cistern Displays, Inc., had debited an expense account for the $400,000 cost of equipment purchased on January 1, year 1. The equipment's life was expected to be five years with no residual value. Straight-line depreciation is used by Cistern. Required: 1. Prepare the appropriate correcting entry assuming the error was discovered in year 4 before the adjusting and closing entries. (Ignore income taxes.) 2. Assume the error was discovered in year 6 after the year 5 financial statements are issued. Prepare the appropriate correcting entry. Soon 2 0 0'000