Johnny's Drive-in pays its employees bi-weekly. The first payday of 2014 will be on January 3 and will compensate employees for work done from December 18-31, 2013. Because the employee work was performed in 2013, the wages expense should be recorded in 2013.

Record the Transaction:

What adjusting entry will need to be made? Total compensation to be paid for the 2 week period is $100,000.

ACCOUNTS

WAGES EXPENSE

CASH

WAGES PAYABLE

ACCOUNTS PAYABLE

AMOUNTS

$100,000

$100,000

$110,000

$110,000