Information from the unadjusted trial balance of Electric Bike on December 31, 2023, the end of the annual accounting period, is as follows:

Required

1. Record adjusting entries for the following information.
a. The records show that the equipment was estimated to have a total estimated useful life of 10 years with a resale value at the end of its life of $14,590.
b. The balance in the Prepaid Insurance account was reviewed and it was determined that $260 was unused at December 31, 2023.
c. A review of the store supplies on December 31, 2023, revealed a balance on hand of $2,030; a similar examination of the office supplies showed that $645 had been used.
d. Accrued salaries payable, $1,850.
e. A count of the merchandise inventory revealed a balance on hand December 31, 2023, of $33,890.

2. Using adjusted trial balance numbers, prepare a multiple-step income statement showing the expenses in detail.

Analysis Component:
Explain why Interest income is shown under Other revenues and expenses on the multiple-step income statement.

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Cash. Accounts receivable Merchandise inventory Store supplies....... Office supplies........ Prepaid insurance. Equipment......... Accumulated depreciation, equipment Accounts payable...... Salaries payable...... Braeden Li, capital...... Braeden Li, withdrawals Interest income Sales ............. Sales returns and allowances Cost of goods sold Salaries expense Rent expense. Supplies expense ********** Depreciation expense, equipment. Insurance expense Totals ************** ***************** Debit Credit $ 8,200 22,765 34,700 2,465 785 3,355 75,590 62,500 $ 13,755 8,100 -0- 170,715 320 529,500 5,170 381,260 96,400 29,200 -0- -0- -0- $722,390 $722,390