A company pays an employee $3,000 for a five day work week, Monday - Friday. The adjusting entry on December 31, which is a Wednesday, is debit Wages Expense, $1,800 and credit Wages Payable, $1,800.

Question

Quizplus · Accepted Answer

The adjusting entry is correct because $1,800 represents the amount of wages earned by the employee for the three days worked from Monday to Wednesday. The remaining $1,200 ($3,000 - $1,800) has already been paid to the employee for the first two days of the week (Monday and Tuesday) and therefore does not need to be recorded in the adjusting entry. The credit to Wages Payable represents the amount owed to the employee for the three days worked but not yet paid as of December 31.

A Company Pays an Employee $3,000 for a Five Day