On March 5, 2017, you were hired by Miami Hangers Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company's records for 2015 and 2016, you discover that no adjustments have yet been made for the items listed below Interest income of $6,800 was not accrued at the end of 2015. It was recorded when received in January 2016 Furniture costing $16,000 was expensed when purchased on July 1, 2015. It is expected to have a 10-year life with no salvage value. The company typically uses straight-line depreciation for all fixed assets Research and development costs of $76,000 were incurred early in 2015. They were capitalized and were to be amortized over a 4-year period. Amortization of $19,000 was recorded for 2015 and $19,000 for 2016 On January 2, 2015, Miami Hangers leased a building for 5 years at a monthly rental of $12,000. On that date, the company paid the following amounts, which were expensed when paid 1. 2. 3. 4. Security deposit First month's rent Last month's rent $10,000 12,000 12,000 $34,000 The company received $28,000 from a customer at the beginning of 2015 for services that it is to be performed evenly over a 2-year period beginning in 2015. None of the amount received was reported as unearned revenue at the end of 2015 Merchandise inventory costing $34,600 was in the warehouse at December 31, 2015, but was incorrectly omitted from the physical count at that date. The company uses the periodic inventory method 5. 6. Instructions What is the effect of each item on the 2015 and 2016, December 31, income statement and retained earnings balance? Assuming the 2016 books are not closed, what are the journal entries to correct these 1. 2. errors