QUESTION 26

A review of the ledger of Nesta Co. at December 31, 2005, produces the following data pertaining to the preparation of annual adjusting entries.

(a) Salaries and Wages Payable $0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $800 each per week, and three employees earn $500 per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December. (b) Notes Payable $100,000. This balance consists of a note for one year at an annual interest rate of 9%, dated June 1. Instructions Prepare the adjusting entries at December 31, 2005. Show all computations.