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At the beginning of 2023 , the Mackinac Company purchased a machine for $510,000 (salvage value of $60,000 ) that had a useful life of
At the beginning of 2023 , the Mackinac Company purchased a machine for $510,000 (salvage value of $60,000 ) that had a useful life of 6 years. The bookkeeper used straight-line depreciation, but failed to deduct the salvage value in computing the depreciation base. Depreciation has been recorded through 2025. The errors were discovered on 1/10/26; the 2025 books are still open. Correcting journal entries would include what entry to 2025 Depreciation Expense? Select one: a. $10,000 debit b. $10,000 credit c. $20,000 debit d. $20,000 credit On 12/31/24, the Cheboygan Company received $2,000 for prepaid insurance and recorded the entire amount as revenue. The policy covered the period 1/1/25 to 12/31/25. The error was discovered on 1/10/26; the 2025 books are still open. The correcting journal entry will include what entry to 1/1/25 Retained Earnings? Select one: a. $1,000 debit b. $1,000 credit c. $2,000 debit d. \$2,000 credit
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