Accrued Liabilities}

Charger Inc. had the following items that require adjusting entries at the end of the year.

a. Charger pays its employees \(\$ 5,000\) every Friday for a five-day work week. This year December 31 falls on a Wednesday.

b. Charger earned income of \(\$ 800,000\) for the year for tax purposes. Its effective tax rate is \(35 \%\). These taxes must be paid by February 28 of next year.

c. Charger borrowed \(\$ 280,000\) with a note payable dated August 1 . This note specifies \(6 \%\). The interest and principal are due on March 31 of the following year.

d. Charger's president earns a bonus equal to \(10 \%\) of income in excess of \(\$ 650,000\). Income for the year was \(\$ 800,000\). This bonus is paid in May of the following year and any expense is charged to wages expense. (Assume the bonus paid is based on his/her pre-tax income.)
\section*{Required:}
Prepare the adjusting journal entries to record these transactions at the end of the current year.
\section*{OBJECTIVE 2 Exercise