Question

Record journal entry: The primary operating expense for the year were employee wages of 433,416 with 401,630 paid in cash and the rest to be paid to employees the following year. What is the journal entry to record this expense?

Answer 1

The journal entry to record employee wages of $433,416, with $401,630 paid in cash and $31,786 unpaid, involves debiting Wages Expense for the total amount and crediting both Cash and Wages Payable for their respective amounts.

Step-by-step explanation:

To record the operating expense of employee wages for the year, you make the following journal entry:

• Debit Wages Expense for the total wages: $433,416
• Credit Cash for the amount paid: $401,630
• Credit Wages Payable for the unpaid amount: $31,786

The journal entry would look like this:

Wages Expense ………… Debit $433,416

Cash ………………… Credit $401,630

Wages Payable ………… Credit $31,786

This entry reflects that the company incurred the full expense of the wages during the year, but only part of the wages were paid in cash, with the remainder to be paid in the next year.