Explain Where Each of the Following Items Should Appear in the Financial

Essay

Explain where each of the following items should appear in the financial statements of a corporation:
(1)The accounting department discovered that an entry was made last year to Insurance Expense instead of to Prepaid Insurance.The after-tax effect of the charge to Insurance Expense was $5,000.
(2)The company grants five of its employees the option to purchase 100 shares of its $5 par value common stock at its current market price of $20 per share anytime with the next five years.None of the employees exercised the options in the current year.