Question

Bank 'n' Roll, Inc. paid $55,000 to employees who worked this month for $30,000 and last month fro $25,000 (recorded last month as a liability in Accrued Expenses Payable). The entry to record the payments includes a __________.

Answer 1

Dr. Cr.

Accrued Expenses Payable $25,000

Salary Expense $30,000

Cash $55,000

$30,000 is the expense of current month so it's been charged to Salary expense account directly. $25,000 is the accrued expense of last month which was recorded as liability in Accrued Expenses Payable account. A debit entry for Expense and Payment of liability and credit for the payment of cash.