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At the end of 2020, Majors Furniture Company failed to accrue $65,000 of interest expense that...

At the end of 2020, Majors Furniture Company failed to accrue $65,000 of interest expense that accrued during the last five months of 2020 on bonds payable. The bonds mature in 2032. The discount on the bonds is amortized by the straight-line method. The following entry was recorded on February 1, 2021, when the semiannual interest was paid:

Interest expense 78,000
Discount on bonds payable 2,000
Cash 76,000

   
Required:
1-a. Prepare any journal entries necessary to correct the error, as well as any adjusting entry for 2021 related to the situation described. (Ignore income taxes.)

Journal entry 1. Record the entry to correct the error.

Journal entry 2. Record the adjusting entry for interest on Dec. 31, 2021.


1-b. Prepare the journal entries that should have been recorded, if done correctly to start.

Journal entry 1. Record the adjusting entry for interest on Dec. 31, 2020 as it should have been recorded.

Journal entry 2. Record the interest payment on February 1, 2021 as it should have been recorded.

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