Santo Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2020.

Santo Design Adjusted Trial Balance December 31, 2020
		Dr.		Cr.
Cash		$ 11,350
Accounts Receivable		21,500
Supplies		5,000
Prepaid Insurance		2,500
Equipment		60,000
Accumulated DepreciationEquipment				$ 35,000
Accounts Payable				5,000
Interest Payable				150
Notes Payable				5,000
Unearned Service Revenue				5,600
Salaries and Wages Payable				1,300
Common Stock				10,000
Retained Earnings				3,500
Service Revenue				61,500
Salaries and Wages Expense		11,300
Insurance Expense		850
Interest Expense		150
Depreciation Expense		7,000
Supplies Expense		3,400
Rent Expense		4,000		000,000
		$127,050		$127,050

Instructions

a. Prepare an income statement and a retained earnings statement for the year ending December 31, 2020, and an unclassified balance sheet at December 31.

b. Answer the following questions.

1. If the note has been outstanding 6 months, what is the annual interest rate on that note?

2. If the company paid $17,500 in salaries in 2020, what was the balance in Salaries and Wages Payable on December 31, 2019?