For the year ended December 31, 2008, Lopez Company has implemented an employee bonus program equal to 3% of Lopez’s net income, which employees will share equally. Lopez’s net income (prebonus)

is expected to be $500,000, and bonus expense is deducted in computing net income.

1 Compute the amount of the bonus payable to the employees at year-end (use the method described in the chapter and round to the nearest dollar).

2 Prepare the journal entry at December 31, 2008, to record the bonus due the employees.

3 Prepare the journal entry at January 19, 2009, to record payment of the bonus to employees.

AppendixLO1