CRANE COMPANY Balance Sheet December 31, 2021 Cash $24,000 Accounts Payable $11,000 Inventory 24,600 Interest Payable 200 Prepaid Insurance 4,800 Notes Payable 40,000 Equipment 30,400 Owner's Capital 32,600 $83,800 $83,800 During January 2022, the following transactions occurred. (Crane Company uses the perpetual inventory system.) 1. Crane paid $200 interest on the note payable on January 1, 2022. The note is due December 31, 2023. 2. Crane purchased $208,880 of inventory on account. 3. Crane sold for $352,000 cash, inventory which cost $212,000. Crane also collected $22,880 in sales taxes. 4. Crane paid $184,000 in accounts payable. 5. Crane paid $13,600 in sales taxes to the state. 6. Paid other operating expenses of $24,000. 7. On January 31, 2022, the payroll for the month consists of salaries and wages of $48,000. All salaries and wages are subject to 7.65% FICA taxes. A total of $7,120 federal income taxes are withheld. The salaries and wages are paid on February 1. Adjustment data: 8. Interest expense of $200 has been incurred in January on the notes payable. 9. The insurance for the year 2022 was prepaid on December 31, 2021. 10. 11. The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over 5 years with a $1,600 salvage value. Employer's payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.6% federal unemployment tax. (a) Prepare journal entries for the transactions listed above and the adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.) No. Account Titles and Explanation Debit Credit 1. 3. 3. 4. 5. 6. 7. (To record sales revenue.) (To record cost of goods sold.) 7. 8. 9. 10. 11