# Salaries payable

Q27. Salaries payable
Entity A pays salaries on the 20th of each month. Monthly salaries expense is $180,000. On December 20, 20×1, Entity A paid$180,000 in cash for monthly salaries.
What are the journal entries to be prepared on December 20 and 31, 20×1?

A27. Salaries expense is recorded on the debit side. Salaries payable is recorded on the credit side.

(1) December 20, 20×1: to record the payment of monthly salaries

 Debit Credit Salaries expense 180,000 Cash 180,000

(2) December 31, 20×1: to accrue salaries expense for the period from December 21 to December 31, 20×1

 Debit Credit Salaries expense 60,000 Salaries payable 60,000

[Note]
1. Increase in salaries expense (expense): debit
2. Increase in salaries payable (liability): credit
3. Salaries for the period from December 21 to December 31
= $180,000 x 1/3 =$60,000

[Exercise]
Entity B hired one employee on December 11, 20×1. The first salary will be paid on January 10, 20×2. Monthly salary is $6,000. (1) December 31, 20×1: to accrue salaries expense for the period from December 11 to December 31, 20×1  Debit Credit Salaries expense 4,000 Salaries payable 4,000 [Note] 1. Increase in salaries expense (expense): debit 2. Increase in salaries payable (liability): credit 3. Salaries expense for the period from December 11 to December 31, 20×1 =$6,000 x 2/3 = $4,000 (2) January 10, 20×2: to record the cash payment of$6,000 monthly salary

 Debit Credit Salaries payable 4,000 Salaries expense 2,000 Cash 6,000

[Note]
1. Decrease in salaries payable (liability): debit
2. Increase in salaries expense (expense): debit
3. Decrease in cash (asset): credit
4. Salaries expense for the period from January 1 to January 10, 20×2
= $6,000 x 1/3 =$2,000