Question

Johnny’s Drive-in pays its employees bi-weekly. The first payday of 2014 will be on January 3 and will compensate employees for work done from December 18-31, 2013. Because the employee work was performed in 2013, the wages expense should be recorded in 2013.Record the Transaction:What adjusting entry will need to be made? Total compensation to be paid for the 2 week period is $100,000.ACCOUNTSWAGES EXPENSECASHWAGES PAYABLEACCOUNTS PAYABLEAMOUNTS$100,000$100,000$110,000$110,000

Answer 1

Answer:

Accounts

Wages Expense

Wages Payable

$100,000

$100,000

Explanation:

As the expense is accrued but not paid at the end of 2013. The transaction requires an adjusting entry. This will charge a wages expense and create the wages payable liability. Ultimately on January 3 it will be paid. Wages for the two weeks are $100,000 and the 14 days has been passed for the pay period until year end of 2013.