Question - Kory Co's auditor discovered some errors. No errors were corrected during 2010. The errors are described as follows:
(1) Beginning inventory on January 1, 2010, was understated by $4,000.
(2) A two-year insurance policy purchased on April 30, 2010, in the amount of $24,000 was debited to Prepaid Insurance. No adjustment was made on December 31, 2010, or on December 31, 2011.
Required: Prepare appropriate journal entries (assume the 2011 books have not been closed). Ignore income taxes.