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On January 2, 20X1, Air, Inc. agreed to pay its former president $300,000 under a deferred compensation arrangement. Air should have recorded this expense in
On January 2, 20X1, Air, Inc. agreed to pay its former president $300,000 under a deferred compensation arrangement. Air should have recorded this expense in 20X0 but did not do so. Air's reported income tax expense would have been $70,000 lower in 20X0 had it properly accrued this deferred compensation. In its December 31, 20X1, financial statements, Air should adjust the beginning balance of its retained earnings by a
$230,000 debit
$300,000 credit
$230,000 credit
$370,000 debit
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