Nishi Corporation prepares financial statements for each month-end. As part of its accounting process, estimated income taxes are accrued each month for 33% of the current months net income. The income taxes are paid in the first month of each quarter for the amount accrued for the prior quarter. The following information is available for the fourth quarter of the year. When tax computations are completed on January 20 of the following year, Nishi determines that the quarters Income Taxes Payable account balance should be $35,517 on December 31 (its unadjusted balance is $31,317).

October net income	$	34,000
November net income		22,100
December net income		38,800

1. Determine the amount of the accounting adjustment (dated as of December 31) to produce the proper ending balance in the Income Taxes Payable account. 2. Prepare journal entries to record (a) the December 31 adjustment to the Income Taxes Payable account and (b) the later January 20 payment of the fourth-quarter taxes.