A business pays biweekly salaries of $20,000 every other Friday for a 10-day period ending on that day. The last payday of December is Friday, December 27. Assume the next pay period begins on Monday, December 30, and the proper adjusting entry is journalized at the end of the fiscal period (December 31). The entry for the payment of the payroll on Friday, January 10, includes a
A) debit to Salary Expense of $16,000
B) debit to Salary Expense of $4,000
C) credit to Salaries Payable of $16,000
D) credit to Salaries Payable of $4,000

Question

Quizplus · Accepted Answer

The payroll covers a 10-day period, and the fiscal period ends on December 31. Therefore, 8 days of salary expense ($16,000) should be recorded as an expense for the current period, and the remaining 2 days ($4,000) will be recorded in the next period. The entry on January 10 will include a debit to Salary Expense for the 8 days ($16,000) incurred in the current period.

A Business Pays Biweekly Salaries of $20,000 Every Other Friday