During the course of the year 2 audit of Smithsone Company, the auditor discovered the following situations that may or may not require an adjusting journal entry. Each audit finding is independent of any of the other findings. Select the account or accounts that would comprise the adjusting journal entry, if required, to correct the audit finding. Accounts may be used once, more than once, or not at all.

Audit finding

A) The banks confirmation reply regarding the companys line of credit indicated that the December, year 2, interest was unpaid at year-end. Accruals for monthly interest expense have been made for 11 months in year 2 by the company.

B) Employee overtime pay for hours worked before year-end, but paid in the following year, were not recorded in year 2.

C) In the last week of year 2, the company recorded revenue for services rendered to some clients in year 3.

D) During year 2, a former client sued the company for inappropriate work. Legal counsel has advised that it is reasonably possible that the company will be assessed damages. An amount can be estimated.

Section list for amount

Cash	Accrued liabilities	Interest expense
Accounts receivable	Common stock	Other income
Other current assets	Revenues	Accumulated depreciation
Property and equipment	Allowance for doubtful accounts	Disclosure but not entry required
Accounts payable	Operating expenses	No entry or disclosure required

Provide answers for A-D. State the issue, as well as the accounts that need debited and credited to receive full credit in this assignment.