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8 November, 06:04

Cooper Company has employed a bookkeeper who is inexperienced. On December 26, after reviewing the records for the year, you discover the following error. On June 1, Cooper Company paid a supplier $300 on account. The bookkeeper recorded this by debiting Cash for $300 and crediting Accounts Payable for $300.

Required: Prepare a correcting entry on December 26. Make sure to enter the day for each separate transaction.

Answers (1)
  1. 8 November, 07:12
    The correcting Journal entry is as follows:

    On December 26,

    Accounts payable A/c Dr. $600

    To cash A/c $600

    (To record the correct entry)

    Working notes:

    Correct entry:

    Accounts payable A/c Dr. $300

    To cash $300

    Wrong entry:

    Cash A/c Dr $300

    To Accounts payable $300

    Hence the above correcting entry by debiting Accounts Payable $600 and crediting cash $600 to get the correct net effect of debit to Accounts Payable $300 and credit to cash $300.
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