Wages Payable: Adjusting Entry and Subsequent Payment
Response to the following problem:
The company pays its employees at the end of the day Friday for work done during that five-day work week. Total wages for a week are $24,000. In the current year, December 31 occurred on a Tuesday.
(1) Make the adjusting entry necessary on the company's books on December 31 with respect to unpaid employee wages and
(2) make the journal entry necessary on Friday, January 3, of the following year to record the cash payment of wages for the week.
Ignore the new year's holiday season and assume that employees worked each of the five days. Note: When making the January 3 entry, don't forget the adjusting entry that was made on December 31.