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9 July, 11:32

Knowledge Check 01 Simpson Company purchased $900 of equipment by paying cash and recorded the expenditure as a purchase of land. The error was discovered a week later. Prepare the two journal entries required to correct the error. (First, reverse the error and then record the appropriate entry.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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  1. 9 July, 11:47
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    Dr Cash900

    Cr Land900

    Dr. Equipment 900

    Cr Cash 900

    Explanation:

    Simpson Company Journal entries required to correct the error that occured, in which expenditure was credited to Cash, but was debited to Land instead of Equipment.

    Dr Cash900

    Cr Land 900

    To reverse erroneous entry

    Dr. Equipment900

    Cr Cash 900

    To record correct entry
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