Question

Pablo Management has five part-time employees, each of whom earns $250 per day. They are paid on Fridays for work completed Monday through Friday of the same week Near year-end, the five employees worked Monday, December 31, and Wednesday through Friday, January 2, 3, and 4. New Year's Day (January 1) was an unpaid holiday.

 1. Prepare the year-end adjusting entry for wages expenses.

 2. Prepare the journal entry to record payment of the employees' wages on Friday, January 4.

Answer 1

1.

date	accounts	debit	credit
dec 31	Wages expense a/c	1,250
	..........To wages payable a/c		1,250
	(amount = 5 employees * 250 per day)

2.

date	accounts	debit	credit
jan 4	wages expense a/c	3,750
	wages payable a/c	1,250
	.............To cash a/c		5,000
	(wages expense = 3 days*5 employees*$250=>3,750) cash = 3750+1250 =>5,000