Todd, the accounting manager at SNK Co., had a busy day. He completed the recording for several transactions, but made some errors.

Please identify the errors. There are 4 distinct errors (one in each scenario, so each scenario has an error). For the 4 errors you identify, briefly indicate both the error and how Todd should have done the accounting (for it to be correct).

First Scenario: He recorded the purchase of the following investments into the following accounts:

Security	Account
Certificate of deposit maturing in 2 months	Cash Equivalents
300 shares of common stock, intended to be sold in 9 months	Current Investment in Security
150 shares of preferred stock, intended to be sold in 2 years	Current Investment in Security

Second Scenario: He realized that specific customers were not going to pay their bills because they had lost their jobs due to the pandemic. SNK Co. uses the aging method for bad debts. To address this, he reduced Accounts Receivable (for the amount of the uncollectible accounts) and increased Bad Debt Expense (for the same amount).

Third Scenario: He recorded warranty expense, which entailed increasing Warranty Expense (with a dollar amount that reflected the cost of repairs performed during the current period for products sold in previous periods) and increasing Warranty Liability.

Fourth Scenario: He received payment from a customer for a previous sale on credit (assume the sale was recorded at the time). The customer was offered a discount of 2/10, n/30, and they paid in time to receive the discount. He recorded cash going up by the discounted amount, and reduced the Accounts Receivable by that same amount.