Pablo Management has six part-time employees, each of whom earns $120 per day.

Pablo Management has six part-time employees, each of whom earns $120 per day. They are normally paid on Fridays for work completed Monday through Friday of the same week. They were paid in full on Friday, December 28, 2017. The next week, the six employees worked only four days because New Year’s Day was an unpaid holiday.
 
Prepare the adjusting entry that would be recorded on Monday, December 31, 2017 and Friday, January 4, 2018.

 

Explanation

December 31, 2017: To record accrued wages for one day (6 workers × $120) = $720.

January 4, 2018: To record accrued and current wages.
Wages expense = 6 workers × 3 days × $120 = $2,160.
Cash = 6 workers × 4 days × $120 = $2,880.