Preparing Financial Statements and Closing Entries Hayley Inc. prepared the following adjusted trial balance as of December 31, 2020. Adjusted Trial Balance Account Debit Credit Cash $6,000 $ Accounts receivable 6,400 Inventory 8,000 Prepaid insurance 240 Equipment 45,000 Accumulated depreciation-equipment 9,000 Accounts payable 7,000 Salaries payable 800 Interest payable Note payable 80 10,000 Common stock 22,000 Retained earnings 16,000 Dividends 600 Sales 70,000 Cost of goods sold 40,000 Salaries expense 23,840 Repair expense 420 300 440 2,640 1,000 $134,880 $134,880 Insurance expense Selling expense Depreciation expense Interest expense Totals a. Prepare the income statement for Hayley Inc. for the year ended December 31, 2020. b. Prepare closing entries as of December 31, 2020.