Answer:
1.
$42,000
2.
Dr. Bonus Expense $42,000
Cr. Employees Bonus Payable $42,000
3.
Dr. Employees Bonus Payable $42,000
Cr. Cash $42,000
Step-by-step explanation:
As Bonus is Based on the Net Income value
Net Income (pre bonus) = $1,400,000
Bonus rate = 3% of Net Income
Bonus value = $1,400,000 x 3% = $42,000
2.
A liability is created while recording the expense of the bonus. Expense has debit nature so, it is debited to record it and Liability has credit nature so, it is credited.
3.
As cash is paid, to reduce the amount of cash, we credited the cash account because it has debit nature as an asset.
Liability is paid off, to reduce the balance of liability we have debited the liability account because it has credit nature.