Question

Athena Company provides employee health insurance that costs $15,400 per month. In addition, the company contributes an amount equal to 4% of the employees' $154,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a: Multiple Choice Credit to Employee Benefits Expense $15,400. Debit to Employee Retirement Program Payable $6,160. Debit to Payroll Taxes Expense $21,560. Debit to Employee Benefits Expense $21,560. Debit to Medical Insurance Payable $15,400.

Answer 1

Answer:

Debit to Employee Benefits Expense $21,560.

Explanation:

The journal entry is shown below:

Employee Benefits Expense $21,560

  To Employee Retirement Program Payable $6,160

  To Employee Health Insurance Payable $15,400

(Being accrued benefit is recorded)

The computation is shown below:

For Employee Retirement Program Payable

= Gross salary × contributed percentage

= $154,000 × 4%

= $6,160

And, for Employee Benefits Expense , it would be

= $15,400 + $6,160

= $21,560