Morgan Companys balance sheet at December 31, 2019, is presented below.MORGAN COMPANYBalance SheetDecember 31, 2019Cash$31,500Accounts Payable$12,750Inventory30,500Interest Payable278Prepaid Insurance6,204Notes Payable55,500Equipment39,300Owners Capital38,976$107,504$107,504During January 2020, the following transactions occurred. (Morgan Company uses the perpetual inventory system.)1.Morgan paid $278 interest on the note payable on January 1, 2020. The note is due December 31, 2021.2.Morgan purchased $242,000 of inventory on account.3.Morgan sold for $482,000 cash, inventory which cost $266,000. Morgan also collected $31,330 in sales taxes.4.Morgan paid $226,000 in accounts payable.5.Morgan paid $15,500 in sales taxes to the state.6.Paid other operating expenses of $21,000.7.On January 31, 2020, the payroll for the month consists of salaries and wages of $58,000. All salaries and wages are subject to 7.65% FICA taxes. A total of $8,500 federal income taxes are withheld. The salaries and wages are paid on February 1.Adjustment data:8.Interest expense of $278 has been incurred on the notes payable.9.The insurance for the year 2020 was prepaid on December 31, 2019.10.The equipment was acquired on December 31, 2019, and will be depreciated on a straight-line basis over 5 years with a $3,000 salvage value.11.Employers payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.8% federal unemployment tax.