Comprehensive Problem 10-01 a-b, c1-c3 (Part Level Submission) Novak Corp.'s balance sheet at December 31, 2019, is presented below. Novak Corp. Balance Sheet Cash Inventory Prepaid insurance Equipment December 31, 2019 $31,500 Accounts payable 30,500 Interest payable $12,950 2,350 6,480 Bonds payable 47,000 39,420 Common stock 27,100 Retained earnings 18,500 $107,900 $107,900 During 2020, the following transactions occurred. 1. Novak paid $2,350 interest on the bonds on January 1, 2020. Novak sold for $481,500 cash inventory which cost $260,000. Novak also collected $33,705 sales taxes. Novak paid $226,500 on accounts payable. 2. Novak purchased $240,200 of inventory on account. 3. 4. 5. Novak paid $2,350 interest on the bonds on July 1, 2020. 6. The prepaid insurance ($6,480) expired on July 31. 7. 8. 9. Paid other operating expenses, $90,300. 10. On August 1, Novak paid $12,000 for insurance coverage from August 1, 2020, through July 31, 2021. Novak paid $23,600 sales taxes to the state. Retired the bonds on December 31, 2020, by paying $44,000 plus $2,350 interest. 11. Issued $90,500 of 8% bonds on December 31, 2020, at 104. The bonds pay interest every December 31. Adjustment data: 1. Recorded the insurance expired from item 7.