Exercise 14-16 Error in amortization schedule [LO14-3] Wilkins Food Products, Inc., acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2016. In payment for the machine Wilkins issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 8%. Lawrence made a conceptual error in preparing the amortization schedule, which Wilkins failed to discover until 2018. The error had caused Wilkins to understate interest expense by $58,000 in 2016 and $53,000 in 2017. Required: 1. Determine which accounts are incorrect as a result of these errors at January 1. 2018, before any adjustments. (Ignore income taxes) (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as Incorrect.) Note payable understated. 2 Retained earnings understated. 2 2016 Interest expense overstated. 2 2016 Interest expense understated. 2 Retained earnings overstated. 2 Note payable overstated. 2 2017 Interest expense overstated. 2 2017 Interest expense understated. 2. Prepare a journal entry to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.)