The before - tax income for Crane Co . for 2 0 2 5 was $ 1 0 9 , 0 0 0 and $ 8 0 , 0 0 0 for 2 0 2 6 . However, the accountant noted that the following errors had been made: Sales for 2 0 2 5 included amounts of $ 4 0 , 4 0 0 which had been received in cash during 2 0 2 5 , but for which the related products were delivered in 2 0 2 6 . Title did not pass to the purchaser until 2 0 2 6 . The inventory on December 3 1 , 2 0 2 5 , was understated by $ 8 , 5 0 0 . The bookkeeper in recording interest expense for both 2 0 2 5 and 2 0 2 6 on bonds payable made the following entry on an annual basis. Interest Expense , 1 5 , 0 0 0 Cash 1 5 , 0 0 0 The bonds have a face value of $ 2 5 0 , 0 0 0 and pay a stated interest rate of 6 % . They were issued at a discount