Wilkins Food Products, Inc., acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2014. In payment for the machine Wilkins issued a three year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 9%. Lawrence made a conceptual error in preparing the amortization schedule, which Wilkins failed to discover until 2016. The error had caused Wilkins to understate interest expense by $65,000 in 2014 and $60,000 in 2015. Required: 1. Determine which accounts are incorrect as a result of these errors at January 1, 2016, before any adjustments. (Select all that apply.) 2. Prepare a journal entry to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)