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On 12/31/14, the Cheboygan Company paid $4,000 of prepaid insurance and expensed the entire amount. The policy covered the period 1/1/15 to 12/31/18.
The error was discovered on 1/10/18; the 2017 books are still open. The correcting journal entry will include what entry to 1/1/17 Retained Earnings?
Select one:
a. $3,000 debit
b. $3,000 credit
c. $2,000 debit
d. $2,000 credit
e. $1,000 debit
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