Question

To record newly issued long-term debt of $2,750, the company's accountant credited Accounts Payable instead. Prepare the journal entry to correct the error.

Answer 1

To correct the error of recording newly issued long-term debt of $2,750 in the wrong account, the accountant needs to prepare a journal entry to rectify the mistake. The correct journal entry is debit Long-Term Debt $2,750 and credit Accounts Payable $2,750.

Step-by-step explanation:

To correct the error of recording newly issued long-term debt of $2,750 in the wrong account, the accountant needs to prepare a journal entry to rectify the mistake. Since the Accounts Payable account was mistakenly credited instead of the correct account, which should be Long-Term Debt, the correction should involve crediting Accounts Payable and debiting Long-Term Debt.

The correct journal entry to rectify the error would be:

1. 
   
2. Debit Long-Term Debt $2,750
3. 
   
4. Credit Accounts Payable $2,750

This journal entry would properly reflect the recording of the newly issued long-term debt and fix the mistake made by initially crediting the wrong account.