- On August 1 of 20X0, your company borrows $100,000 and signs a 5-year note with an annual interest rate of 8%. Principal and all accrued interest will be paid at maturity. In January of 20X1, before the books are closed, you discover that no interest was accrued for 20X0.
What is the correcting journal entry?
If no correcting journal entry is recorded, how are the 20X0 income statement and balance sheet, respectively, affected?