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Accrual
Balance Sheet and P&L Question
In January I made an accrual entry for Bonus dated 1/31/11, debit bonus wages, credit accrued bonus, which showed up on my balance sheet and my P&L. Then I made a reversing entry for February, debit accrual bonus, credit bonus wages. I created the payroll for the binus pay in February, and my binus pay for February is zero, is this correct. Thanks. |
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When you recognized the bonus wages as being earned your journal entry should be: Debit Bonus Wages Expense for the amount earned Credit Bonus Wages Payable for the amount earned. When you paid the bonus wages the journal entry will be: Debit Bonus Wages Payable for the amount Credit Cash for the amount. |
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