Question

Riverrun Co. provides medical care and insurance benefits to its retirees. In the current year, Riverrun agrees to pay $5,500 for medical insurance and contribute an additional $9,000 to a retirement program. Record the entry for these accrued (but unpaid) benefits on December 31.

Answer 1

Answer:

Date           Description                                  Debit                 Credit

Dec 31      Employee Benefit Exp. A/c        $14,500

                Medical Insurance Payable A/c                            $5,500

               Employee Retiement Payable A/c                        $9,000  

Being th recognition of  retirement benefits by Riverrun Co.

Explanation:

The question is to journalize the accrued benefits to be recognized by Riverrun Co payable to its employees on December 31.

A very important key in the question is the accrued benefits hence, we calculate as follows:

First what is the Medical Insurance Benefit accrued     $5,500

What is the Employee Retirement Program Accrued     $9,000

What is the total employee benefits expense to the company $14,500

Based on these calculations,

We Journalize as follows:

Date           Description                                  Debit                 Credit

Dec 31      Employee Benefit Exp. A/c        $14,500

                Medical Insurance Payable A/c                            $5,500

               Employee Retiement Payable A/c                        $9,000  

Being th recognition of  retirement benefits by Riverrun Co.