Exercise 20-23 (Algo) Error correction; three errors [LO20-6] Below are three independent and unrelated errors. a. On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $1,300. In January 2021, when it paid employees for the December 27-January 2 workweek, Wolfe-Bache made the following entry: Salaries expense Cash 1,300 1,300 b. On the last day of 2020, Midwest Importers received a $80,000 prepayment from a tenant for 2021 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2021. c. At the end of 2020, Dinkins-Lowery Corporation failed to accrue interest of $7,000 on a note receivable. At the beginning of 2021, when the company received the cash, it was recorded as interest revenue. Required: For each error: 1. What would be the effect of each error on the income statement and the balance sheet in the 2020 financial statements? 2. Prepare any journal entries each company should record in 2021 to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What would be the effect of each error on the income statement and the balance sheet in the 2020 financial statements? 7 nces 2. Prepare any journal entries eacn company snouia recora in zU21 to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What would be the effect of each error on the income statement and the balance sheet in the 2020 financial statements? Error a Income Statement: Balance Sheet: Error b Income Statement: Balance Sheet Error c Income Statement Balance Sheet Required Required 2 > Required 1 Required 2 Prepare any journal entries each company should record in 2021 to correct the errors. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < A B C Record correction of salaries expense error. Note: Enter debits before credits. Transaction a General Journal Debit Credit Record entry Clear entry Required 1 View general journal Required 1 Required 2 Prepare any journal entries each company should record in 2021 to correct the errors. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < A Record correction of rent received in advance. Note: Enter debits before credits. Transaction b General Journal Debit Credit Record entry Clear entry View general journal int rences Required 1 Required 2 Prepare any journal entries each company should record in 2021 to correct the errors. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet