BRIEF EXERCISE 4.7

Accruing Unpaid Salaries

Milford Corporation pays its employees on the 15th of each month. Accrued, but unpaid, salaries on December 31, year 1, totaled $210,000. Salaries earned by Milfords employees from January 1 through January 15, year 2, totaled $216,000.

1. Prepare the necessary adjusting entry for salaries expense on December 31, year 1.

2. Record the companys payment of salaries on January 15, year 2.