Be sure to read very carefully when the error was discovered as each situation is different. For each situation, prepare the necessary correcting journal entry. If no entry is required, enter N/A.

Freedom Company purchased a machine in 2020 for $45,000 and properly recorded in PP&E. It was discovered in early 2021 after the 2020 books were closed that Freedom had not depreciated the equipment. The equipment has a useful life of fifteen years from the date of purchase in 2020 and Freedom normally takes a full year of depreciation in the year of acquisition using the S/L method. Prepare the correcting entry when the error is discovered.

In early 2021 before the 2020 books are closed, it is discovered that bonuses of $34,000 earned in 2020 but being paid in 2021 were not accrued in 2020.