Sandhill Corporation's balance sheet at December 31, 2021, is presented below. SANDHILL CORPORATION Balance Sheet December 31, 2021 Cash $ 28,300 Accounts payable $ 13,400 Inventory 24,900 Interest payable 2,600 Prepaid insurance 6,000 Bonds payable 52,000 Equipment 42,400 Common stock 21,000 Retained earnings 12,600 $ 101,600 $ 101,600 During 2022, the following transactions occurred. Sandhill uses a perpetual inventory system. 1. Sandhill paid $ 2,600 interest on the bonds on January 1, 2022. 2. Sandhill purchased $ 242,100 of inventory on account. 3. Sandhill sold for $ 446,000 cash inventory which cost $ 251,200. Sandhill also collected $ 26,760 sales taxes. 4. Sandhill paid $ 232,200 on accounts payable. 5. The prepaid insurance ($ 6,000) expired on July 31. 6. On August 1, Sandhill paid $ 12,000 for insurance coverage from August 1, 2022, through July 31, 2023. 7. Sandhill paid $ 23,200 sales taxes to the state. 8. Paid other operating expenses, $ 90,500. 9. Redeemed the bonds on December 31, 2022, by paying $ 49,920 plus $ 2,600 interest. 10. Issued $ 89,900 of 8% bonds on December 31, 2022, at 103. The bonds pay interest every June 30 and December 31. Adjustment data: 1. Recorded the insurance expired from item 6. 2. The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over 5 years with a $ 3,200 salvage value. No. Account Titles and Explanation Debit Credit 1. Interest Payable Cash 2. Inventory Accounts Payable Cash Sales Revenue Sales Taxes Payable (To record sales revenue.) || | MIMI Cost of Goods Sold Inventory (To record cost of goods sold.) 4. Accounts Payable Cash 4 Accounts Payable Cash 5. Interest Expense Cash 6. Insurance Expense Prepaid Insurance 7. Prepaid Insurance Cash 8. Sales Taxes Payable TON Cash 9. Other Operating Expenses Cash (To record payment of bond interest) (To record redemption of bonds) 10. 3 No. Account Titles and Explanation Debit Credit 1. (to adjust insurance expense) 2. (to adjust depreciation expense)