Hoover Corp. had the following errors occur during 2020. Assume these errors have not been corrected. Error #1: Failed to accrue interest receivable on an interest-bearing note at the end of the year. Error #2: Failed to estimate bad debts at the end of the year. 5. What is the effect of Error #1 on Hoover's net income, total assets, total liabilities, and total stockholders' equity in 20X1? A. B. C. D. E. Net Income No affect Overstated Understated Understated Overstated Total Assets Understated Overstated Understated No affect Understated Total Liabilities Overstated No affect No affect Overstated Understated Total Stockholders' Equity No affect Overstated Understated Understated No affect 6. What is the effect of Error #2 on Hoover's net income, total assets, total liabilities, and total stockholders' equity in 20X1? A. B. C. D. E. Net Income No effect Understated Overstated Understated No effect Total Assets No effect Understated Overstated Overstated No effect Total Liabilities Overstated No effect No effect No effect Understated Total Stockholders' Equity Understated Understated Overstated Understated Overstated 1. On 9/1/20, Dabney Corp. provided services in exchange for a 2-year, 12% promissory note having a face value of $8,000. The note's face value plus accrued interest compounded annually is due to be paid back in two years (on 9/1/22). Dabney Corp. has a calendar year-end and uses the effective interest method. The entry to record accrued interest revenue on 12/31/20 should include a: A. Credit to "Interest Revenue for $240. B. Credit to "Discount on Note Receivable for $240. C. Debit to Interest Receivable for $320. D. Debit to Discount on Note Receivable for $320