A business pays biweekly salaries of $20,000 every other Friday for a ten-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

A business pays biweekly salaries of $20,000 every other Friday for a ten-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

Quizplus · Accepted Answer

Salary expense per day = $20,000 / 10 = $2,000
Number of working days till January 10 from the previous pay day, December 27 = 2 days in December + 8 days in January = 10 days
Salary expense on January 10 = $2,000 × 8 days = $16,000
Salaries payable = $2,000 × 2 days = $4,000
January 10 Debit Credit
Salary Expense 16,000
Salaries Payable 4,000
$\quad $  $\quad $  $\quad $  $\quad $  $\quad $  $\quad $  Cash 20,000

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