CP10-1 James Corporation's balance sheet at December 31, 2014, is presented below. AMES CORPORATION Balance Sheet December 31, 2014 $30,500 Accounts payable $ 13,750 Cash Inventory25,750 Prepaid insurance 5,600 2,500 50,000 20,000 Interest payable Bonds payable Equipment43,000 Common stock $104,850 Retained earnings 18,600 $104,850 During 2015, the following transactions occurred 1. James paid $2,500 interest on the bonds on January 1, 2015. 2. James purchased $241,100 of inventory on account. 3. James sold for $450,000 cash inventory which cost $250,000. James also collected $31,500 sales taxes. 4. James paid $230,000 on accounts payable 5. James paid $2,500 interest on the bonds on July 1, 2015 6. The prepaid insurance ($5,600) expired on July 31. 7. On August 1, James paid $12,000 for insurance coverage from August 1, 2015, through July 31, 2016. 8. James paid $24,000 sales taxes to the state. 9. Paid other operating expenses, $91,000. 10. Retired the bonds on December 31, 2015, by paying $47,000 plus $2,500 interest. 11. issued $90,000 of 8% bonds on December 31, 2015, at 104. The bonds pay interest every June 30 and December 31. Adjustment data: 1. Recorded the insurance expired from item 7. 2. The equipment was acquired on December 31, 2014, and will be depreciated on a straight-line basis over 5 years with a $3,000 salvage value