Windsor Corporation’s balance sheet at December 31,2024 , is presented below. During 2025 , the following transactions occurred. Windsor uses a perpetual inventory system. 1. Windsor paid $7,500 interest on the bonds on January 1, 2025. 2. Windsor purchased $723,300 of inventory on account. 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 $9,100 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. (List all debit entries before credit entries. Credit account titles are automatically indented when 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.) During 2025 , the following transactions occurred. Windsor uses a perpetual inventory system. 1. Windsor paid $7,500 interest on the bonds on January 1,2025. 2. Windsor purchased $723,300 of inventory on account. 3. Windsor sold for $1,440,000 cash inventory which cost $792,000. Windsor also collected $86,400 sales taxes. 4. Windsor paid $690,000 on accounts payable. 5. Windsor paid $7,500 interest on the bonds on July 1,2025. 6. The prepaid insurance ($16,800) expired on July 31 . 7. On August 1, Windsor paid $30,600 for insurance coverage from August 1, 2025, through July 31,2026. 8. Windsor paid $51,000 sales taxes to the state. 9. Paid other operating expenses, $273,000. 10. Redeemed the bonds on December 31,2025 , by paying $144,000 plus $7,500 interest. 11. Issued $270,000 of 8%,10-year bonds on December 31,2025 , at 103 . The bonds pay interest every June 30 and December 31 .
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