Question

Preparing Adjusting and Closing Entries Across Two Periods
Norton Company closes its accounts on December 31 each year. The company works a five-day work week and pays its employees every two weeks. On December 31, 2015, Norton accrued $940 of salaries payable. On January 7, 2016, the company paid salaries of $2,400 cash to employees.
Prepare journal entries to:

(a) Accrue the salaries payable on December 31:

General Journal
		Description	Debit	Credit
Dec.	31	Salaries ExpenseSalaries PayableCashRetained Earnings
		Salaries PayableSalaries ExpenseRetained EarningsCash
		To record accrued salaries.

(b) Close the Salaries Expense account on December 31 (the account has a year-end balance of $50,000 after adjustments).

General Journal
		Description	Debit	Credit
Dec.	31	CashSalaries PayableRetained EarningsSalaries Expense
		Salaries PayableSalaries ExpenseCashRetained Earnings
		To close the Salaries Expense account.

(c) Record the salary payment on January 7.

General Journal
		Description	Debit	Credit
Jan.	7	Salaries Payable
		Retained EarningsSalaries ExpenseCashIncome Summary
		Salaries PayableSalaries ExpenseCashRetained Earnings
		To record payment of salaries.

Answer 1

Date	GENERAL JOURNAL	Debit	Credit
Dec 31	Salaries Expense	$940
	Salaries Payable		$940
	(To record accrued salaries.)
Dec 31	Retained Earnings	$50,000
	Salaries Expense		$50,000
	(To close the Salaries Expense account.)
Jan 07	Salaries Payable	$940
	Salaries Expense	$1,460
	Cash		$2,400
	(To record payment of salaries.)