Cash paid out during 2016 for wages totaled $125,000. Records indicate that salaries for the last week of December 2016 amounted to $7,500 and would be paid at the end of the first week in January 2016 (a two-week pay period).

The solution journal entries are:

Wages Expense $120,000

Wages Payable $ 5,000

Cash $125,000

Wages Expense $7,500

Wages Payable $ 7,500

Can someone walk me through the first journal entry? I don't understand where the $5000 wages payable is coming from.