Amount of the employee bonuses for the current year

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Reference no: EM131202935

Springfield Company offers a bonus plan to its employees and the amount of the employee bonuses for the current year is estimated to be $958,000 to be paid during January of the following year. The journal entry on December 31 to record the bonuses is:

Debit Unearned Bonuses $958,000; credit Bonus Payable $958,000.

No entry since the bonuses are not paid until January.

Debit Employee Bonus Expense $958,000; credit Prepaid Employee Bonus $958,000.

Debit Estimated Bonus Payable $958,000; credit Cash $958,000.

Debit Employee Bonus Expense $958,000; credit Bonus Payable $958,000

Reference no: EM131202935

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