Question

On Tuesday, March 31, 20X1, Bravo Company accrues wages of $1000. On Friday, April 3, Bravo paid employee wages of $2500 for the week. Prepare the journal entry needed for March 31, 2021.

A) Debit Wages Expense $1000, Credit Wages Payable $1000
B) Debit Wages Payable $1000, Credit Wages Expense $1000
C) Debit Cash $2500, Credit Wages Payable $2500
D) Debit Wages Payable $2500, Credit Cash $2500

Answer 1

On March 31, Bravo Company should debit Wages Expense $1000 and credit Wages Payable $1000. The correct option is: A.

Step-by-step explanation:

The correct journal entry needed for March 31, 2021 is Option A) Debit Wages Expense $1000, Credit Wages Payable $1000.

Accruing wages means recording the expense in the books even though it has not been paid yet. So, on March 31, Bravo Company will debit (increase) the Wages Expense account by $1000 to record the expense and credit (increase) the Wages Payable account by $1000 to reflect the liability owed to the employees.

No cash is involved in this transaction, so options C and D are not correct. Option B is incorrect because it debits the Wages Payable account instead of the Wages Expense account.