Question

"X" Company has one employee who earns $50 per day and is paid every Friday, Assume December 31, 2020 is a Wednesday. Give the adjusting entry on December 31, 2020 and the entry to record the payment of the salary on January 2. 2021 (ignore payroll taxes). 12/31/20

Answer 1

Part 1

Salary expense per day = $50

Will accrue for 3 days

Salaries payable on December 31 = Salary expense per day x 3

= 50 x 3

= $150

Date	General Journal	Debit	Credit
Dec. 31, 2020	Salary expense	$150
	Salary payable		$150
	( To record salary expense)
Jan. 2, 2021	Salary payable	$150
	Salary expense	$100
	Cash		$250
	( To record salary payment)

Part 2

Cost of machine = $5,500

Useful life = 5 years

Salvage value = $500

Annual depreciation = (Cost of machine- Salvage value)/Useful life

= (5,500-500)/5

= $1,000

Date	General Journal	Debit	Credit
Dec. 31, 2020	Depreciation expense	$1,000
	Accumulated depreciation - Machine		$1,000
	( To record depreciation expense)

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