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Kingbird Corporations balance sheet at December 31, 2024, is presented below. Kingbird Corporation Balance Sheet December 31, 2024 Cash $60,000 Accounts payable $27,500 Inventory 61,500

Kingbird Corporations balance sheet at December 31, 2024, is presented below.

Kingbird Corporation Balance Sheet December 31, 2024

Cash

$60,000

Accounts payable

$27,500

Inventory

61,500

Interest payable

5,000

Prepaid insurance

11,200

Bonds payable

100,000

Equipment

76,000

Common stock

50,000

Retained earnings

$26,200
$208,700 $208,700

During 2025, the following transactions occurred. Kingbird uses a perpetual inventory system.

1. Kingbird paid $5,000 interest on the bonds on January 1, 2025.
2. Kingbird purchased $482,200 of inventory on account.
3. Kingbird sold for $960,000 cash inventory which cost $528,000. Kingbird also collected $57,600 sales taxes.
4. Kingbird paid $460,000 on accounts payable.
5. Kingbird paid $5,000 interest on the bonds on July 1, 2025.
6. The prepaid insurance ($11,200) expired on July 31.
7. On August 1, Kingbird paid $20,400 for insurance coverage from August 1, 2025, through July 31, 2026.
8. Kingbird paid $34,000 sales taxes to the state.
9. Paid other operating expenses, $182,000.
10. Redeemed the bonds on December 31, 2025, by paying $96,000 plus $5,000 interest.
11. Issued $180,000 of 8%, 10-year bonds on December 31, 2025, at 103. 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, 2024, and will be depreciated on a straight-line basis over 5 years with a $6,100 salvage value.
3. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.)

Prepare journal entries for the transactions listed above and adjusting entries

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