Novak Company began operations on January 2, 2025. It employs 12 individuals who work 8-hour days and are paid hourly. Each employee earns 13 paid vacation days and 8 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows. Novak Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time. Date Account Titles and Explanation Debit Credit 2025 Salaries and Wages Expense Salaries and Wages Payable (To accrue the expense and liability for vacations) Salaries and Wages Expense (To record sick leave paid) (To record vacation time paid) 2026 (To accrue the expense and liability for vacations) (To record sick leave paid) (To record vacation time paid)