Question

An adjusting entry was made on year-end December 31 to accrue salary expense of $1,500. Assuming the company does not prepare reversing entries. What entries would be prepared to record the $3,600 payment of salaries in January of the following year?

Answer 1

Answer and Explanation:

The Journal entries are shown below:-

1. Salary Expense $1,500

          To Salary Payable $1,500

(Being salary expense is recorded)

Here we debited the salary expenses as it increased the expenses and we credited the salary payable as  it also increased the liabilities

2. Salary Expense Dr, $2,100

   Salary Payable Dr, $1,500

              To Cash $3,600

(Being cash paid is recorded)

Here we debited the salary expenses and salary payable as it increased the expenses and decreased the liabilities  and we credited cash as it reduced the assets