Assume that no reversing entries are made by the entity. How would the entity record the transaction for payment of wages if $5200 was accrued for wages at the end of the year and the first payment of wages in the following year was $63 900?
A) DR Salaries expense $63 900; CR Cash $63 900
B) DR Salaries payable $5200; DR Salaries expense $58 700; CR Cash $63 900
C) DR Salaries expense $63 900; CR Salaries payable $5200; CR Cash $58 700
D) DR Salaries expense $69 100; CR Salaries payable $5200; CR Cash $63 900

Question

Quizplus · Accepted Answer

The entity should record the payment of wages by debiting Salaries Payable for the amount accrued at the end of the year ($5200) and debiting Salaries Expense for the remaining amount paid in the following year ($63,700). The total debited to Salaries Expense should equal the total amount of wages paid ($63,900). The entity should credit Cash for the total amount paid ($63,900). Therefore, the correct journal entry is: DR Salaries Payable $5200; DR Salaries Expense $58,700; CR Cash $63,900.

Assume That No Reversing Entries Are Made by the Entity