On December 31,2018,employees who earn $500 per day have worked eight days and will be paid on January 6,2019.The adjusting entry on December 31,2018,includes a debit to Salaries Expense for $4,000.

Question

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Since the employees have worked eight days and earn $500 per day, the total amount of salaries that will be paid on January 6, 2019 is $4,000. Therefore, the adjusting entry on December 31, 2018 should include a debit to Salaries Expense for $4,000 in order to recognize the expense for the period in which it was incurred (December 31, 2018).

On December 31,2018,employees Who Earn $500 Per Day Have Worked