A company pays its employees every fortnight (or every 10 working days). It last paid its employees on Friday 18 February 2022. The next payroll will be paid on Friday 4 March 2022. On that date, the wages expense will be $16,000 including PAYE tax of $4,000.

Note that there are six more working days in February (2125 and 28).

What will be the adjusting entry that has to be recorded in the general journal at the end of February?

a.

DR Accrued Wages $12,000, DR Accrued PAYE $4,000 and CR Wages Expense $16,000

b.

DR Wages Expense $16,000, CR Accrued Wages $12,000 and CR Accrued PAYE $4,000

c.

DR Accrued Wages $7,200, DR Accrued PAYE $2,400 and CR Wages Expense $9,600

d.

DR Wages Expense $9,600, CR Accrued Wages $7,200 and CR Accrued PAYE $2,400

e.

No adjusting entry is required