Oriole Corporation's balance sheet at December 31, 2021, is presented below. Cash Inventory Prepaid insurance Equipment ORIOLE CORPORATION Balance Sheet December 31, 2021 $30,500 Accounts payable 25,600 Interest payable 5.200 Bonds payable 43,700 Common stock Retained earnings $105,000 $13,700 2.550 51,000 18,100 19,650 $105,000 During 2022, the following transactions occurred. Oriole uses a perpetual inventory system. 1. 2 3. 4. 5. 6. 7. 8. Oriole paid $2,550 interest on the bonds on January 1, 2022. Oriole purchased $240,400 of inventory on account. Oriole sold for $452,800 cash inventory which cost $248,000. Oriole also collected $27,168 sales taxes. Oriole paid $230,100 on accounts payable. Oriole paid $2,550 interest on the bonds on July 1, 2022. The prepaid insurance ($5,200) expired on July 31. On August 1, Oriole paid $12,000 for insurance coverage from August 1, 2022, through July 31, 2023. Oriole paid $23,600 sales taxes to the state. Paid other operating expenses, $92,900. Redeemed the bonds on December 31, 2022, by paying $48,960 plus $2,550 interest. Issued $92,100 of 8% bonds on December 31, 2022, at 103. The bonds pay interest every June 30 and December 31. 9. 10. 11. Adjustment data: 1. 2. Recorded the insurance expired from item 7. The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over 5 years with a $2,900 salvage value. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) 3. No. Account Titles and Explanation Debit Credit 1. Interest Payable 2550 Cash 2550 2. Inventory 240400 Accounts Payable 240400 3. Cash 479968 Sales Revenue 452800 27168 Sales Taxes Payable (To record sales revenue.) Cost of Goods Sold 248000 248000 Inventory (To record cost of goods sold.) Accounts Payable 4. 230100 Cash 230100 5. Interest Expense 2550 Cash 2550 6. Insurance Expense 5200 Prepaid Insurance 5200 7. Prepaid Insurance 12000 Cash 12000 8. Sales Taxes Payable 23600 Cash 23600 9. Other Operating Expenses 92900 Cash 92900 10. Interest Expense 2550 Cash 2550 (To record payment of bond interest) Bonds Payable 51000 Gain on Bond Redemption 2040 Cash 48960 (To record redemption of bonds) 11. Cash 94863 Bonds Payable 92100 Premium on Bonds Payable 2763 (To record redemption of bonds) 11. Cash 94863 Bonds Payable 92100 Premium on Bonds Payable 2763 Prepare the adjusting entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit Credit 1. Insurance Expense 5000 Prepaid Insurance 5000 (to adjust insurance expense) 2. Depreciation Expense 8160 Accumulated Depreciation Equipment 8160 (to adjust depreciation expense) 3. Income Tax Expense 27144 Income Taxes Payable 27144 (to adjust income tax expense) ORIOLE CORPORATION Trial Balance 12/31/22 Debit Credit Cash $ 190121 $ Income Tax Expense 27144 Prepaid Insurance 7000 Accounts Payable 24000 Accumulated Depreciation-Equipment 8160 Sales Revenue 452800 Gain on Bond Redemption 2040 Cost of Goods Sold 248000 Interest Expense 5100 Insurance Expense 10200 Other Operating Expenses 92900 Depreciation Expense 8160 Income Taxes Payable 27144 For the Year Ending 12/31/22 Sales Revenue $ 452800 Cost of Goods Sold 248000 Gross Profit 204800 Operating Expenses Other Operating Expenses $ 92900 i Insurance Expense 10200 i Depreciation Expense 8160 i Total Operating Expenses 111260 Income From Operations 93540 Other Revenues and Expenses Interest Expense 5100 i Gain on Bond Redemption 2040 3060 Income Before Taxes 90480 Income Tax Expense 27144 i Net Income /(Loss) $